Asda's executive chairman Allan Leighton has acknowledged the supermarket chain still has "plenty to do" in its ongoing turnaround efforts, following the release of disappointing annual sales and earnings figures.
Significant Sales Decline Reported
The UK's third largest supermarket chain revealed on Friday that its sales, excluding fuel, fell by 3.3% to £21 billion in 2025 compared to the previous year. The Leeds-based retailer also reported that adjusted earnings tumbled dramatically by a third to £764 million for the same period.
IT Upgrade Problems Disrupt Operations
Asda has been undergoing a major transformation under returning boss Allan Leighton, attempting to regain market share lost to rivals including Tesco, Sainsbury's and Lidl. However, these efforts suffered a significant setback from a problematic £1 billion IT upgrade implemented last year.
The company confirmed it experienced "severe disruption" linked to the IT transition, which resulted in reduced product availability and weaker sales performance. Asda had been separating more than 2,500 legacy IT systems and moving them to its own platforms since being sold by Walmart to Zuber and Mohsin Issa and private equity firm TDR Capital in 2021.
Quarterly Performance and Recovery Signs
In the latest business update, Mr Leighton noted that sales declined by 2.4% in the final quarter of last year as the company continued to feel the impact of the IT disruption. Despite these challenges, he expressed optimism about the business developing "positive momentum" and returning to sales growth.
"There is plenty to do but there is also plenty of upside," the Asda boss stated. "We have that momentum and a strong balance sheet to allow us to push forward."
Recent Improvements and Future Outlook
Asda reported that product availability has now recovered to an eight-year high of 95%, leading to stronger sales in recent months. Total like-for-like sales fell by 1.6% in January and by 1% in February but have grown by 1.2% so far in March.
Mr Leighton added: "As we enter the second year of our turnaround, we have an improved customer offer, stable core systems, a strengthened balance sheet and a strong leadership team to deliver our formula for growth. Our progress in key areas like price, availability, and customer satisfaction is edging forwards, reflected in positive like-for-like sales growth in our stores for the last two months."
The supermarket giant continues to operate with Walmart maintaining a 10% stake in the business, while the majority ownership rests with the Issa brothers and TDR Capital following the 2021 acquisition.
