Asda Returns to Growth in Turnaround Milestone

The Leeds-headquartered supermarket says sales have started rising again for the first time in more than two years, though its executive chairman warns the turnaround is far from complete

Asda, the Leeds-headquartered supermarket, has returned to sales growth for the first time in more than two years, an early but symbolic milestone in its long turnaround. In the first seven weeks of the current quarter, sales at established stores excluding fuel edged up 0.2%, with food sales up 0.7%. It follows a tougher second quarter, in which like-for-like sales still fell 2.3%. Executive chairman Allan Leighton called the return to growth a major milestone but stressed the business still has much to do.

Why This Matters For Leeds

A return to growth suggests the turnaround under Allan Leighton is gaining traction, which is reassuring for the city. Asda is one of Leeds’s largest private employers so its recovery matters well beyond the checkout; the health of a hometown institution is tied to jobs, investment and local pride, so evidence the corner may be turning is welcome news for the city’s economy.

What Asda Reported

The headline is the return to growth in the current quarter, the first in over two years, which Asda said narrowed the gap to the wider market to its tightest since 2023. The second quarter itself, covering April to June, was still soft: total revenue including fuel edged up 0.4% to £6.5bn, but food sales were down 1.9%. Market share held steady at 11.5%. The improvement has been driven by a stronger customer offer; upgraded fresh and frozen ranges, more than 400 new products, an extended Rewards loyalty scheme and sharper prices. On price the supermarket has been winning recognition, retaining The Grocer 33 annual pricing award and topping every Which? branded-groceries comparison since April. Chief financial officer Michael Gleeson said disciplined cash management and a robust capital structure gave a solid foundation for the rest of the year.

“Returning to growth in the current quarter for the first time in more than two years is a major milestone. While this progress is encouraging, we are still in the foothills of recovery.”

— Allan Leighton, Executive Chairman, Asda

A Turnaround With Further to Run

Leighton, who returned in 2024, has described the recovery as a three-to-five-year project and reckons the company is about a third of the way through. The retailer, majority-owned by private equity firm TDR Capital alongside the Issa family and with Walmart retaining a stake, has been weighed down by the cost of servicing debt taken on in its 2021 buyout, and its market share is still below where it was a year ago. But there are signs of momentum beyond the core shops. The supermarket is pressing ahead with an Ocado partnership to overhaul online deliveries, piloting from late this year, and has become the first retailer outside the US to partner with Amazon Ad Services, creating a new revenue stream. Nearly half of the group’s revenue now comes from outside traditional grocery, from George clothing to fuel, pharmacy and convenience.