Asda has stemmed a prolonged sales decline, reporting that food sales grew by 0.1 per cent in the third quarter to 30 September, marking the first increase since the first quarter of 2024. The supermarket said total revenues rose 3.1 per cent to £6.5 billion when including fuel sales, though excluding fuel, underlying sales fell by 0.1 per cent. The company attributed the modest improvement to aggressive price cuts on staples and enhancements to its online grocery service.
The turnaround comes as former Morrisons boss David Potts took over leadership last week. Potts said the grocer had 'made good progress but significant opportunities remain'. Online grocery sales rose 6.9 per cent over the quarter, which Asda credited to 'strong participation' in its loyalty scheme Asda Rewards. The company also highlighted signs of improvement in specific categories including hot drinks, ice cream and chilled poultry, as well as its clothing line George, which now has Helen Connolly, the former chief executive of fashion brand New Look, running the operation.
Asda has faced significant headwinds since being taken over by private equity firm TDR Capital in 2021, losing market share to discounters Lidl and Aldi while struggling with debt pressures. The third quarter last year saw disruption from a failed IT transformation programme. Chief financial officer Michael Gleeson said that 'the breadth of our business, spanning food, clothing, fuel, pharmacy and other services' meant Asda could 'meet more of our customers' everyday needs and gives us more opportunities to grow'. Potts, who previously ran Morrisons from 2015 to 2023, has instructed the supermarket's 1,100 store managers to spend more time on the shop floor assisting staff.
Potts replaces Allan Leighton, who served as executive chairman for two years from November 2024. Leighton had previously said that Asda was 'about a third' of the way through its recovery. At Morrisons, Potts oversaw the group's £10 billion sale to private equity firm Clayton Dubilier & Rice in 2021, though that company has also struggled in the aftermath of its debt-fuelled takeover.