The chairman of Asda, Allan Leighton, has urged the Labour party to use the upcoming Budget as an opportunity to stimulate economic growth rather than impose further taxes on businesses. Leighton described the moment as a "tipping point" where the government can shift its economic strategy from one that "inhibits growth" to one that "enhances it."
Leighton's comments align with concerns raised by other business leaders, including Sports Direct tycoon Mike Ashley, who have criticized proposals to increase taxes on larger retailers to fund support for other sectors. Ashley described such a move as "disastrous" and "delusional," arguing that rising business rates and employment costs are significant obstacles.
"All of the things that have been the policy so far have added cost to, not just retail, across the piece. And then that has reduced the profitability of those organisations, and therefore they've got less money to invest in growth. It's economics 101," Leighton stated, supporting Ashley's assessment.
Leighton, who rejoined Asda in November 2024, shared signs of a potential turnaround at the British grocer. Sales reportedly increased by 0.2% over the seven weeks leading up to August 18, marking the first return to growth in over two years. He characterized this as an "important milestone" in the company's recovery, which is estimated to be about one-third complete. This revival effort has involved price reductions and significant online upgrades, although Asda reported a 2.3% decrease in sales for the three months ending June 30, with revenues of £5.1 billion. Pre-tax losses for the company widened to £989 million in 2025 from £599 million in 2024, with total sales falling 3.4% to £25.9 billion.
Leighton acknowledged that the recovery plan is long-term and that price cuts impact profits. He also noted the potential pressure on prices due to summer weather affecting crop yields, stating that Asda is working closely with its thousands of producers to manage inflation and ensure product availability. He added that Asda typically inflates prices below the market rate, which can be advantageous during periods of high inflation. However, Leighton emphasized that consumer sentiment remains the primary driver of sales, dependent on consumers' willingness and ability to spend.