Allan Leighton admits asda's recovery won't be quick

In the UK, Asda, the third-largest supermarket, has faced significant challenges, reporting falling sales and declining market share. For the year 2024, Asda's like-for-like sales saw a decline of 3.4%, which was labeled as 'disappointing' by Allan Leighton, the company's chairman. The revenue for the past year was £21.7 billion, marking a 0.8% decrease from the previous year. This declining trend prompted Asda to initiate a turnaround plan to revive its business, following the return of Allan Leighton, who had previously served as chief executive from 1996 to 2000. Leighton indicated that a transformation would take considerable time and effort. He described current investment strategies as part of a 'war chest' aimed at cost reduction and store improvements, including the reintroduction of the Rollback pricing scheme, which aimed to decrease prices on over 4,000 products by an average of 25%. However, he also acknowledged that these substantial spending plans would adversely affect profits in the short term. The decision to invest significantly comes as Asda navigates numerous challenges in the grocery market, facing stiff competition from rivals and the necessity to enhance pricing strategies, product availability, and range architecture. Despite these concerns, there has been a slight improvement in market share, which edged up by 0.3% since December, indicating some progress despite the ongoing difficulties. The company’s adjusted earnings, bolstered by the success of its fashion brand George, also increased by 5.8%. Asda's leadership aims for a long-term strategy rather than a quick fix, and Leighton emphasizes the importance of regaining customer trust. He has assured that the firm would focus on significant investments to rebuild its reputation and market presence. This commitment to long-term change reflects the broader challenges facing the retail grocery sector in the UK, as consumer behavior shifts and competitive pressures mount.