Asda Returns to Quarterly Sales Growth After Two-Year Decline
Asda reported its first quarterly like-for-like sales growth in more than two years, with a 0.2% rise at established stores excluding fuel in the three months to the end of June 2026. The Guardian
The figure is small in absolute terms, but it reverses a 2.3% like-for-like decline in the previous quarter and ends a losing streak stretching back to the first three months of 2024. Like-for-like sales measure revenue at stores that have been open for at least a year, stripping out the effect of new openings or closures. The UK's third-largest grocer has now posted a single quarter of positive growth after a sequence of negative results that included a 2.8% like-for-like decline in Q3 2025, when Executive Chairman Allan Leighton told investors the company did not expect to re-establish its Q2 2025 sales levels. That Q2 2025 figure had itself been a 0.2% decline, flagged at the time as a fourth consecutive quarter of improved like-for-like sales, down 2.9% from Q1 2025. The Guardian Asda Newsroom Asda Newsroom
Leighton, who returned to Asda in November 2024 for a second stint after a 20-year absence, attributed the return to growth to lower prices, more customers in the business, and momentum in online operations. The quarter was also aided by greater stability in Asda's IT systems after a costly migration away from the technology stack of its former owner Walmart. Since the 2020 buyout by the Issa brothers and private equity firm TDR Capital, which valued the chain at £6.8bn and is now controlled by TDR, Asda has grappled with falling sales and profits, a large debt pile, and close to £1bn spent revamping those IT systems. The Guardian
Growth in the quarter was narrowly based. Food sales at established stores rose 0.7%, while clothing and other non-food categories contracted. Leighton cited the late August bank holiday timing as a drag on general-merchandise and clothing performance. On the cost side, food inflation has re-emerged in 2026, driven by a hot, dry summer that hit crops such as tomatoes and cucumbers, a factor that may have supported nominal food sales even as volumes remain uncertain. The Guardian
Looking ahead, Asda has a deal with online specialist Ocado to provide technology aimed at improving its website and delivery systems from next year. The partnership signals that management views digital capability as a structural gap rather than a cyclical weakness. The Guardian
The competitive backdrop leaves little room for celebration. Aldi sits less than one percentage point behind Asda in UK market share and continues to grow at a faster pace, threatening Asda's position as the third-largest chain. A 0.2% like-for-like print, even one that breaks a two-year losing streak, does not by itself close that gap. The question for Asda is whether the upturn can accelerate before Aldi overtakes it outright. The Guardian
The broader context here is a retailer caught between post-buyout operational debt, technology transition costs, and a discounter encroaching from below. Leighton's turnaround thesis rests on price investment, digital improvement via the Ocado partnership, and IT stabilization delivering compounding gains. A first positive quarter is necessary evidence that the thesis is working. It is not yet sufficient evidence that Asda can defend its market position. The path from 0.2% to a credible growth run-rate, under the pressure of Aldi's momentum and a debt-laden balance sheet, is where the real test lies. The Guardian
