The boss of Asda has warned there is no “quick fix” to boost the supermarket’s flagging sales as it tries to win back customers from rivals.
Allan Leighton, Asda’s executive chairman, said profits would be lower this year due to investment plans aimed at lowering prices for customers and improving the availability of products.
Britain’s third largest supermarket has been struggling to keep up with its competitors, losing market share to bigger rivals such as Tesco and discounters Aldi and Lidl last year.
After releasing its latest financial figures on Friday, Mr Leighton said the grocer was aiming for its prices to be five to 10% cheaper than its rivals going forward.
Asda revealed on Friday that sales, excluding fuel, fell almost 1% to £21.7bn last year.
Mr Leighton said the sales figures were “disappointing”, but added that profits being up 6% on 2023 to £1.1bn were “OK-ish”.
“Obviously there are one or two things that we need to fix,” he added. “Our pricing, our availability, and our range architecture – that has all started…we’re starting to make some progress.”
Mr Leighton said the supermarket was looking to put more staff on the shop floor, but acknowledged regaining customers’ trust in the brand would take time.
“We’re flagging a significant investment back into the business, and that is going to materially reduce our profit in the short term as we rebuild the business and we rebuild our market share,” he said.
“I see this not as a profit warning but as an investment warning. This is us taking our profitability down to invest into the company.”
Asda has more 580 supermarkets, almost 500 convenience stores and 769 petrol forecourts.
It has been without a permanent chief executive since 2021. Its co-owner Mohsin Issa stepped down from running the supermarket last year.
In January, Mr Leighton, who returned to Asda in November after 20 years where he was previously chief executive, launched major price cuts – reintroducing the “Rollback” promotion that was first used in the 1990s.
“The only way we have got to rebuild profit is through sales growth,” he added.
