Asda returns to growth for first time in over two years despite ‘challenging’ backdrop
Supermarket chain Asda has returned to growth for the first time in over two years as the company said its turnaround strategy was making progress despite a “challenging” economic backdrop.
Asda said its sales excluding fuel had lifted 0.2 per cent in the seven weeks to August 18, marking the first period of growth for the firm in more than two years.
The company posted a year-on-year increase in revenue including fuel of 2.1 per cent for the period, with food sales also lifting 0.7 per cent.
Speaking on the figures, Allan Leighton, Asda’s executive chairman, said: “Returning to growth in the current quarter for the first time in more than two years is a major milestone for Asda.
“It reflects 18 months of hard work to strengthen our proposition, improving price, availability and the overall shopping experience.
“We saw momentum build in Q2 with stable market share, and we're now seeing that translate into more customers choosing Asda.”
Mr Leighton said that while the progress was “encouraging,” the company is still “in the foothills of recovery,” adding: “There's still more work to do as we focus on building a stronger business for the long term.”
It came as the company also posted its second quarter results, covering the three months from April to June.
During the period, Asda saw its revenue including fuel lift 0.4 per cent to £6.5bn.
Revenue excluding fuel landed at £5.1bn, with like-for-like sales down 2.3 per cent and like-for-like food sales down 1.9 per cent.
The company said its market share had remained “stable” at 11.5 per cent.
Michael Gleeson, Asda’s chief financial officer, said: “A challenging geopolitical and economic backdrop continued to weigh on consumer confidence and household budgets during Q2.
“Despite these pressures, our continued investment in price and the overall customer proposition means we continue to make steady progress in our turnaround journey.
“Disciplined cash management together with a robust capital structure gives us a solid foundation to continue delivering our Formula for Growth plan in the second half of the year."
Asda released figures in June which showed that its 2025 losses had swelled to almost £1bn, sliding from a £599m loss a year earlier.
Mr Leighton had previously warned that his plan to make Asda between five per cent and 10 per cent cheaper than rival supermarkets was likely to “materially reduce” its profits.
The UK’s third largest supermarket chain is undertaking aggressive price cuts to try to restore its fortunes with shoppers.
However, the company came under pressure from a botched IT upgrade last year which hit product availability and dented its sales.
The firm’s 2025 loss was also heavily linked to a £656m one-off cost related to the group’s IT separation from former parent firm Walmart, which still owns a minority stake.
A spokesperson for the company said in June: “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.”