'Asda is supported by strong balance sheet': Retailer sank to £989m pre-tax loss for 2025
Asda has seen losses swell to almost £1 billion as it undergoes a major turnaround.
The UK’s third largest supermarket chain is aggressively cutting prices to try to restore its fortunes with shoppers. Fresh financial accounts showed that the private equity-backed retailer sank to a £989 million pre-tax loss for 2025, sliding from a £599 million loss a year earlier.
The wider loss was linked to a £656 million one-off cost related to the group’s IT separation from former parent firm Walmart, which still owns a minority stake. It added that investment into pricing also dragged on profitability, as well as impairment linked to its property portfolio. Boss Allan Leighton had previously warned that his plan to make Asda between 5 per cent and 10 per cent cheaper than rival supermarkets was likely to “materially reduce” its profits. Adjusted earnings were also down 33 per cent to £761 million for the year, partly due to the Asda Price and Rollback price investment.
A spokesman for Asda said: “The reported loss does not reflect the underlying financial strength of the business – and continued powerful cash generation. Asda is supported by a strong balance sheet and capital structure, with £1.3bn in cash, £2.1 billion of total liquidity at the year end, and the majority of borrowings secured well into the next decade. This gives us the flexibility to continue investing in our long-term growth strategy and deliver a disciplined and sustainable turnaround.”