Asda has reported a significant milestone with its first quarterly sales growth in more than two years. The UK's third-largest supermarket announced that sales increased by 0.1 percent to £4.17 billion in the 12 weeks leading up to September 6. This marks the first period of sales growth since March 2024.
The supermarket chain had been struggling with falling sales since the £6.8 billion takeover by the Issa brothers, financed with the help of TDR Capital, in 2021. Asda has faced increased competition from discounters Lidl and Aldi, alongside debt pressures and disruptions from an IT upgrade.
These latest figures follow recent comments from Asda boss Allan Leighton, who stated in August that the company was approximately one-third of the way through its recovery plan. This plan has involved price reductions and enhancements to online operations. However, recent data indicates Asda's market share has dipped to 11.5 percent from 11.8 percent a year ago, although it retains a stronger 16 percent share in the North of England.
Despite the overall market share decline, Asda is reportedly outperforming competitors in specific categories, including hot drinks, ice cream, and chilled poultry, according to researchers at Worldpanel.
Last month, Leighton expressed optimism after a sales increase of 0.2 percent was recorded over the seven weeks to August 18, signalling a return to growth. This followed a 2.3 percent sales decrease for the three months ending June, when revenue stood at £5.1 billion.
Earlier in the year, Asda's financial reports revealed that pre-tax losses had widened from £599 million in 2024 to £989 million in 2025. Total sales for the previous year fell by 3.4 percent to £25.9 billion.
Leighton, who returned to the retailer in November 2024, has cautioned that the recovery process is not immediate and that price reductions would impact profits. He also noted that external factors, such as the summer heatwave affecting crops, could create price pressures. "The crops are in a tricky state, not just in the UK, everywhere," Leighton said, highlighting produce availability as a key concern. He added that Asda is working closely with its thousands of producers and growers to maintain availability and manage inflation. "We generally inflate below the market anyway, so generally when there's high inflation, that's quite a good thing for us," he noted.
Consumer sentiment remains a critical factor, Leighton emphasized, stating, "But the biggest thing is consumer sentiment. How do people feel? Do they feel as if they want to spend? Do they have the money to spend? That's always been the driver of it."