LONDON, March 27 (Reuters) - British supermarket group Asda reported a 33% slump in annual core profit on Friday, reflecting CEO Allan Leighton’s push to cut prices in an effort to win back shoppers.
Asda Posts 33% Decline in Annual Core Profit Due to Aggressive Price Cuts
Asda’s Financial Performance and Strategic Initiatives
Annual Profit Decline and CEO’s Price Cut Strategy
LONDON, March 27 (Reuters) - British supermarket group Asda reported a 33% slump in annual core profit on Friday, reflecting CEO Allan Leighton’s push to cut prices in an effort to win back shoppers.
Last March, he warned his plan to be 5% to 10% cheaper than traditional rivals would "materially reduce" 2025 profit and said rebuilding Asda would take up to five years.
Ownership Structure and Market Position
Asda, Britain's third largest grocer after Tesco and Sainsbury's, is majority owned by private equity firm TDR Capital.
Financial Results and Sales Performance
It made adjusted EBITDA (after rent) of 764 million pounds ($1.02 billion) in 2025, on sales, excluding fuel, of 21.0 billion pounds, down 3.3%. Like-for-like sales fell 3.1%.
Like-for-like sales remained negative in the first two months of 2026 but were up 1.2% in March.
Price Gap and Product Availability
Asda said it now had a 4% to 7% price gap versus competitors and had restored product availability to an eight-year high of 95%.
"Our progress in key areas like price, availability, and customer satisfaction is edging forwards," Leighton said.
Market Share and Industry Data
However, Industry data published March 3 showed Asda continuing to lose market share.
Operational Changes and Debt Management
Last August, Asda completed an IT overhaul separating its systems from former owner U.S. giant Walmart. While Asda is now largely beyond the disruption this caused, sales in grocery home shopping are "still being inhibited a tad," said Leighton.
Debt Burden and Ownership Changes
Analysts say Asda has been hampered by the cost of servicing debt taken on when Mohsin and Zuber Issa and TDR bought 90% of the group from Walmart in a 6.8 billion pound deal in 2021. Walmart retains a 10% stake.
Asda's net debt was 3.1 billion pounds at the end of December, down 500 million pounds on the year. Asda has total liquidity of 2.1 billion pounds.
($1 = 0.7514 pounds)
(Reporting by James Davey; editing by Sarah Young)
