Asda warns on profits as it vows to revive its fortunes
The boss of the UK’s third biggest supermarket has warned that profits will be ‘materially reduced’ as it embarks on an investment programme to win back customers from its rivals.
Allan Leighton, who made a sensational return to Leeds-headquartered Asda last November, vowed to regain customers’ trust but admitted it ‘will take time’.
Releasing it FY24 results, Asda reported that in the year to 31 December, total revenue, excluding fuel, was broadly flat at £21.7bn, while like-for-like sales were 3.4% lower.
Group adjusted EBITDA after rent increased by 5.8% to £1.14bn in 2024.
Leighton said: “Looking ahead we still have plenty of work to get our business firing on all cylinders again. While regaining customers’ trust will take time, we will undertake a substantive and well backed programme of investment in price, availability and the shopping experience to deliver this. This will materially reduce our profitability this year, which we expect to reverse as our market share recovers and improves over time.”
Leighton, who served as the supermarket’s CEO from 1996 to 2000 during which time he revived its fortunes, resulting in the £6.7bn sale to Walmart, recently reintroduced Asda’s iconic rollback price proposition.
Launched at the end of January, with an average reduction of 25% across 4,000 popular products, Rollback has now been expanded to roughly a quarter of Asda’s entire range.
Asda will add thousands more products to Rollback at regular intervals during the year as part of its strategic shift to move its entire product range to a new low ‘Asda Price’ by the end of 2026.
Leighton added: “Everyone is focused on making Asda the number one choice again for busy hard-working families who demand value. This is what’s driving all our actions across pricing, ranging, merchandising and every part of the business.
“Following the return of Rollback in January, our price advantage has strengthened and customers’ perceptions of the value we offer is starting to improve. We will move thousands more products to Rollback at regular intervals this year.
