Britain's Asda profit slumps 33% on price lowering strategy

Tesco

27/03/2026 14:01

Supermarket had warned of profit fall

2025 core profit 764 million pounds

Sales, excluding fuel, down 3.3% to 21 billion pounds

Like-for-like sales turned positive in March

By James Davey

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.

Asda, Britain's third largest grocer after Tesco TSCO.L and Sainsbury's SBRY.L, is majority owned by private equity firm TDR Capital.

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.

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.

However, Industry data published March 3 showed Asda continuing to lose market share.

Last August, Asda completed an IT overhaul separating its systems from former owner U.S. giant Walmart WMT.O. While Asda is now largely beyond the disruption this caused, sales in grocery home shopping are "still being inhibited a tad," said Leighton.

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)

 ((james.davey@thomsonreuters.com))