Asda Returns to Growth: First Sales Rise in Over Two Years 2026

Asda has heralded its first quarterly growth in more than two years, marking a significant turnaround for the UK's third-largest grocer. The supermarket's executive chair, Allan Leighton, attributed the 0.2% rise in sales at established stores (excluding fuel) to lower prices and an improved online service, calling it "a huge milestone" and "psychologically important for the business."

Asda's Sales Growth: A Turning Point

In the three months to the end of June, Asda saw a 0.2% increase in like-for-like sales, a stark contrast to the 2.3% decline in the previous quarter. This marks the first sales rise since the first quarter of 2024, signaling a potential recovery after a prolonged period of decline.

Leighton emphasized that the company's strong price position, coupled with increased customer traffic and momentum in online sales, has been crucial. "Our price position is strong, we are now getting more customers in the business and we have got some momentum online and that's been the biggest drag," he said.

Key Drivers Behind the Turnaround

Several factors have contributed to Asda's improved performance:

• Price competitiveness: Lower prices have attracted more shoppers, reversing the trend of declining footfall.
• Online service improvements: Enhanced digital platforms and delivery services have boosted online sales, which were previously a major drag.
• IT system stability: After a costly and disruptive transition from Walmart's technology, Asda's systems are now more stable, improving operational efficiency.

Overcoming Challenges: From Walmart to TDR Capital

Asda's journey has been turbulent since its £6.8bn takeover by the Issa brothers and TDR Capital in 2020. The company has faced falling sales and profits, a massive debt pile, and nearly £1bn spent on revamping IT systems. TDR Capital now controls the business, and Leighton returned in November 2024 to lead the turnaround, 20 years after his first stint.

Comparing Asda's Performance

To put Asda's recovery in context, here's a comparison of recent quarterly sales performance:

This table illustrates the sharp contrast between the previous quarter's decline and the current growth, highlighting the effectiveness of recent strategies.

Future Outlook for Asda

While the 0.2% growth is modest, it represents a crucial step forward. Leighton's leadership and the focus on price and online have begun to yield results. However, challenges remain, including intense competition from rivals like Tesco and Sainsbury's, and the need to continue investing in technology and customer experience.

The grocery market in the UK is highly competitive, and Asda's ability to sustain this growth will depend on maintaining its price advantage and further improving online operations. With inflation still affecting consumers, value remains a key driver.

Key Takeaways

• Asda achieved its first sales growth in over two years, with a 0.2% rise in like-for-like sales.
• Lower prices and improved online services were the main catalysts.
• IT system stability after the Walmart transition has helped operations.
• Allan Leighton's leadership is pivotal to the turnaround.

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