As Asda unveils first-quarter trading, chair Allan Leighton talks price-competitiveness, inflation, availability, and George stores’ potential
While Asda’s sales in the first quarter fell, chair Allan Leighton was pleased with turnaround progress so far as pushes on touchstone issues such as price and availability show signs of bearing fruit as the grocer made “progress toward the goal of becoming the UK’s best value full-service supermarket”.
Asda’s first quarter at a glance
- Total revenue excluding fuel down 5.9% year on year to £5bn. (Includes a -1.1% impact from an extra day’s trading in last year’s comparable quarter.)
- Like-for-likes, adjusted for Easter, down 3.1% - a 1.1% improvement on the fourth quarter of 2024. There have been “further improvements” in May.
- George clothing like-for-likes up 3.5%
- Asda Express like-for-likes up 6%
- Product availability up from 90% to 95% since January
Source: Asda. Period to March 31
Opening a gap on price
At the start of the year, Asda reintroduced the Rollback price-cutting programme and introduced a new, lower Asda Price.
So far, Asda has applied Rollback to approximately 10,000 products—about a third of its range—and they have now moved to Asda Price. The retailer said that it has created a gap of between 3% and 6% versus the traditional competitor supermarkets that it aims to beat. That is central to efforts to re-establish its one-time price leadership and reputation as a consumer champion.
Leighton said: “We set out a clear ambition to make Asda the number one choice again for value-conscious families. We are making a material investment to move our entire range to a new, lower Asda Price by the end of next year. We’re making good progress and customers are seeing the difference. We’re mining—I describe it as mining, not minding—the gap on price.”
Inflation commitment
While Asda is lowering prices, cost inflation is affecting retailers and is reflected in higher prices for shoppers across grocery generally. Kantar data published this week showed grocery price inflation of 4.1%—the highest level in more than a year.
Asda has been “inflating behind the market” and Leighton intends to keep it that way. He said: “We’re putting prices down, but we’re also putting cost inflation through at a much lower rate than anybody else—we’re about 2% below everyone else. We’re trying to keep cost prices down and invest at the same time.”
As Asda amps up price appeal, wider inflation could be an opportunity. Leighton said: “It is an opening for us, and value and price has never probably been as important as it is today. As we open a gap…it will be good for shoppers, and will give us distinction in the marketplace.”
He said it is happening at a time when relationships between suppliers and Asda have “improved significantly”, which helps, but that Asda would stick to its guns to offer low prices.
He reasoned: “We represent our customers in these cost price increases. You can’t say you stand up for customers, it’s all about value, and then not do that because cost price increases are coming through.
“We flagged that we’d have a material [price] investment in our business this year, and that is what’s happening.
Availability improving
As well as focusing on price, Asda has sought to improve shopper-friendly retail basics such as availability.
Leighton said: “There has been a striking improvement in availability, which is now up to 95%, and our customer satisfaction measures have improved too.”
The improvement reflects factors such as investment in store hours and the improved relationship with suppliers.
Potential for more George standalones
Alongside food, Asda’s George clothing business is part of its fundamental appeal and it has been performing strongly. Following the opening of a standalone George shop earlier this month, Leighton said today that many more may follow.
He said: We think there is an opportunity for probably around 100 if it turns out the way that we think it will.”
‘Market share is for tomorrow’ as sights set on longer term
Leighton saw Asda’s first-quarter performance and eroded market share position—its lowest on record, according to Kantar—in the context of the ongoing turnaround, and was unconcerned about a snapshot of the moment.
He said: “Market share is about tomorrow, but we’re all about today. Today is executing our plan on price and availability. The other thing that Kantar said was that it’s Asda’s best performance since May last year. Market share is something that comes—it isn’t something that worries me on a day-to-day basis at all.”
“On price, we’re about where we expected to be. On availability, we’re ahead of where we expected to be. In some of the businesses, we’re ahead of where we expected to be.
“But it’s early days. This is long term, what we need to do here. It will take time. We’re sticking to what we’re doing and not being knocked off course. We’ve got some green shoots, but we’ve got a long, long way to go.”
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