Asda recovery ‘set back six months’ by botched £1 billion IT upgrade
Asda has said a botched £1 billion IT upgrade which hit product availability on shelves has set the business back “by six months” amid efforts to turn around its fortunes.
Boss Allan Leighton, who returned to the supermarket chain last year, said its sales slump over the past three months was “self-inflicted” due to disruption from the transition from a previous system linked to former owner Walmart.
It came as the boss also cautioned that consumers are “confused and concerned” following the autumn Budget.
On Friday, the Leeds-headquartered supermarket chain revealed that like-for-like sales slid by 2.8 per cent over the third quarter of 2025 after facing “severe disruption” linked to the IT transition.
Asda had been separating more than 2,500 legacy IT systems and moving them on to its own platforms since being sold by Walmart, which still holds a 10 per cent stake, to Zuber and Mohsin Issa and private equity firm TDR Capital in 2021.
Zuber Issa sold his stake in the business last year.
Asda said it completed the transition in the third quarter of this year, but the process particularly impacted the flow of its stock between depots and stores.
This led to “inconsistent availability levels across stores and particularly online”, Asda said.
Mr Leighton said these issues caused a “poor customer experience” and impacted its app and website in August, hitting sales of home deliveries.
He said: “It’s put us back by around six months, but we now have the base to allow the business to grow.
“Availability is back to where it was in June, operational issues are reducing and performance in recent weeks is improving, but we do not expect to re-establish our Q2 2025 position until Q2 of 2026.”
Asda said it continued to invest in price reductions over the quarter despite this.
Since Mr Leighton took over late last year, the company has sought to return to growth by focusing on pricing, after losing market share to rivals including Tesco, Aldi and Lidl in recent years.
The investment has come amid a backdrop of higher food inflation over the past year and pressure on consumer confidence.
Mr Leighton said that “consumers are confused and concerned” following Wednesday’s Budget, but said it is “too early” to know whether this will hinder spending over Christmas.
Last week, it was announced that Asda has agreed to sell a raft of supermarket stores and a depot in order to bolster its finances.
The debt-laden grocery giant said it would secure £568 million through sale of the sites, which it will then lease back and continue to operate.
Two separate buyers have agreed to purchase 24 stores in total and a depot run by the retailer.
Asda stressed that all locations will continue to run as normal, with no changes for their workers.
Ten of the stores and an Asda depot in Lutterworth, Leicestershire, will be sold to US investment firm Blue Owl Capital while a further 10 will be sold to Blue Owl’s joint venture with Supermarket Income REIT (real estate investment trust).
Asda said a further four stores will be sold to London-based DTZ investors.
Both deals will see Asda rent back the properties on 25-year lease deals, with options to extend by a further ten years.