Asda has reported its first quarterly food sales growth in more than two years, marking a turning point for the struggling supermarket chain as it battles to restore its market position. Same-store food sales edged up by 0.1% in the three months to the end of September, compared with declines in recent quarters. The company said its strategy of heavy investment in prices was delivering results, with online grocery sales jumping 6.9% and its Asda Express convenience stores growing by 2.7%.
The recovery in food sales contrasts sharply with the second quarter performance, when group like-for-like sales fell 2.3% and food sales dropped 1.9%. However, overall group like-for-like sales excluding fuel remained weak at £5.1 billion for the quarter, down 0.1%. Michael Gleeson, the group's chief financial officer, said the third quarter results reflected progress on the company's strategy despite the challenging economic backdrop.
The price-cutting strategy has come at a significant cost to profitability. Asda reported a pre-tax loss of £989 million for 2025, widening from £599 million a year earlier. Adjusted earnings fell 33% to £761 million for the year, with losses partly driven by its Asda Price and Rollback price investment initiatives. This reflects the tension between rebuilding market share through lower prices and maintaining financial health.
Recent industry data from Worldpanel showed Asda's market share slipped to 11.3% in the 12 weeks to November 1, down from 11.6% a year ago, with sales in that period falling 0.5%. Asda was the only one of the major supermarkets to report sales declines in the period. The chain hired former Morrisons chief executive David Potts this month to lead the turnaround effort, while former boss Allan Leighton returned as non-executive chairman. Potts said the company had made good progress but significant opportunities remained to reinvigorate sales.
For UK shoppers and grocery consumers, Asda's price investment means lower costs at the tills, though the chain's financial strain and market share losses suggest the broader competitive battle is intensifying among supermarkets.