Asda’s turnaround efforts are facing renewed scrutiny as it rucks against falling sales, shrinking market share and mounting pressure to cut costs.

The company is pushing ahead with a wide-ranging overhaul under executive chairman Allan Leighton, who returned to the business in 2024, as it attempts to reverse several years of underperformance.

However, the Asda’s sales remained in decline during the summer, despite increased investment in pricing and product availability. Asda sales fell 1.1 per cent year on year in the 12 weeks to 12 July, making it the only one of the UK’s three largest grocers to record a drop during the period.

The decline happened as the wider grocery market grew, with Sainsbury’s sales rising 2.8 per cent and Lidl recording an 8.6 per cent increase. Online retailer Ocado remained the fastest-growing grocer overall, with sales up 14.1 per cent.

Asda has also launched another round of cost cutting, placing around 150 roles at its Leeds head office at risk. The proposed redundancies are understood to affect teams across the business as the retailer seeks to generate savings to support its turnaround plan.

The supermarket has simultaneously reshuffled its senior leadership following the departure of George managing director and non-food chief commercial officer Liz Evans.

Chief operating officer David Lepley has taken responsibility for retail operations alongside supply chain, while Rachel Eyre has become chief customer and digital officer, bringing Asda’s online and digital operations under one executive.

Sales recovery remains elusive

Asda had shown signs of improvement earlier in the year, with like-for-like sales declining 0.8 per cent during its first quarter, compared with a 4.2 per cent fall during the final three months of 2025.

Total first-quarter revenue excluding fuel dropped 1.5 per cent to £5bn, although product availability remained at an eight-year high of more than 95 per cent .

Despite that progress, Asda continues to lose ground against Tesco, Sainsbury’s, Aldi and Lidl.

Its financial position has also added urgency to the turnaround. Asda’s pre-tax loss widened to £989m in 2025, up from £599m the previous year, while revenue including fuel fell 3.4 per cent to £25.9bn.

Net debt stood at £3.1bn at the end of the year, although this was £500m lower than in 2024.

Asda blamed part of its recent performance on disruption caused by Project Future, its £1bn-plus separation from Walmart’s legacy technology systems.

Asda insists its core systems have now stabilised, allowing it to improve availability, pricing and customer satisfaction. The grocer said all of its debt maturities had also been addressed through to 2028.

Asda bets on digital overhaul

Asda is banking on new technology partnerships to strengthen its position, including a deal to introduce Ocado’s Smart Platform across its online grocery operations.

The rollout will begin in 2027 with an upgraded website and app, before expanding to in-store picking and last-mile delivery. Asda currently processes more than 700,000 online grocery orders each week.

Leighton has said the improvements will allow Asda to compete more effectively online while supporting its wider “Formula for Growth” strategy.

However, with sales still falling, losses approaching £1bn and further jobs being removed, the pressure is mounting for Asda’s investment in lower prices, technology and operational improvements to translate into sustained market-share growth.

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