No quick fix to stronger sales, says Asda boss

Asda's president has warned that boosting supermarket sales to win back customers from competitors is not an overnight task and there is no "quick fix." The company is working hard to address the decline in sales.

Asda's chairman, Allan Leighton, stated that profits will decrease this year as the company plans to invest in lowering prices and improving the supply of goods. Asda, the UK's third-largest supermarket, has been struggling to catch up with its competitors, and its market share was eroded last year by larger competitors such as Tesco and discount stores Aldi and Lidl.

Following the release of the latest financial figures on Friday, Leighton stated that Asda's goal is to have commodity prices that are 5% to 10% cheaper than its competitors in the future. Data released by Asda on Friday showed that sales excluding fuel fell by nearly 1% last year to £21.7 billion. Leighton said the sales figures were "disappointing," but he added that profits rose 6% from 2023 to £1.1 billion, which was "okay." He also stated: "Obviously, we need to address one or two issues. Our pricing, supply, and product range structure have already started...we are starting to make some progress."

Leighton stated that the supermarket is considering increasing the number of store employees, but he admitted that regaining customers' trust in the brand will take time. He said: "We are sending an important investment signal, which will greatly reduce our short-term profits, because we need to rebuild the business and rebuild our market share." He added: "I don't think this is a profit warning, but an investment warning. This is our move to reduce profitability in order to invest in the company."

Asda has more than 580 supermarkets, nearly 500 convenience stores, and 769 gas stations. The company has not had a permanent chief executive officer since 2021. Its co-owner, Mohsin Issa, resigned from his operational duties at the supermarket last year. In January, Leighton, who served as Asda's chief executive officer 20 years ago, launched significant price cuts after returning to the company last November, reintroducing the "Rollback" promotion first used in the 1990s. He added: "The only way we can rebuild profits is through sales growth."