Finance
Britain's Asda Profit Slumps 33% on Price Lowering Strategy
Published by Global Banking & Finance Review®
Posted on March 27, 2026
2 min readLast updated: March 27, 2026
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Asda’s adjusted EBITDA slumped 33% to £764 million in 2025, reflecting Allan Leighton’s deliberate price-cutting strategy to regain customers, even as like‑for‑like sales remained negative into early 2026 and market share continued declining.
Asda Posts 33% Decline in Annual Core Profit Due to Aggressive Price Cuts
Asda’s Financial Performance and Strategic Initiatives
Annual Profit Decline and CEO’s Price Cut Strategy
LONDON, March 27 (Reuters) - British supermarket group Asda reported a 33% slump in annual core profit on Friday, reflecting CEO Allan Leighton’s push to cut prices in an effort to win back shoppers.
Last March, he warned his plan to be 5% to 10% cheaper than traditional rivals would "materially reduce" 2025 profit and said rebuilding Asda would take up to five years.
Ownership Structure and Market Position
Asda, Britain's third largest grocer after Tesco and Sainsbury's, is majority owned by private equity firm TDR Capital.
Financial Results and Sales Performance
It made adjusted EBITDA (after rent) of 764 million pounds ($1.02 billion) in 2025, on sales, excluding fuel, of 21.0 billion pounds, down 3.3%. Like-for-like sales fell 3.1%.
Like-for-like sales remained negative in the first two months of 2026 but were up 1.2% in March.
Price Gap and Product Availability
Asda said it now had a 4% to 7% price gap versus competitors and had restored product availability to an eight-year high of 95%.
"Our progress in key areas like price, availability, and customer satisfaction is edging forwards," Leighton said.
Market Share and Industry Data
However, Industry data published March 3 showed Asda continuing to lose market share.
Operational Changes and Debt Management
Last August, Asda completed an IT overhaul separating its systems from former owner U.S. giant Walmart. While Asda is now largely beyond the disruption this caused, sales in grocery home shopping are "still being inhibited a tad," said Leighton.
Debt Burden and Ownership Changes
Analysts say Asda has been hampered by the cost of servicing debt taken on when Mohsin and Zuber Issa and TDR bought 90% of the group from Walmart in a 6.8 billion pound deal in 2021. Walmart retains a 10% stake.
Asda's net debt was 3.1 billion pounds at the end of December, down 500 million pounds on the year. Asda has total liquidity of 2.1 billion pounds.
($1 = 0.7514 pounds)
(Reporting by James Davey; editing by Sarah Young)
Key Takeaways
- •Adjusted EBITDA fell 33% to £764 million in 2025 due to price‑cutting to be 5‑10% cheaper than rivals (fashionunited.uk)
- •Like‑for‑like sales dropped ~3% in 2025 and remained negative into early 2026, albeit with a 1.2% improvement in March (investing.com)
- •Market share fell further—down to around 11.5–12.6% by early 2025—the weakest in over a decade, despite improvements in price gap and availability (en.wikipedia.org)
References
Frequently Asked Questions about Britain's Asda profit slumps 33% on price lowering strategy
1Why did Asda's annual core profit fall by 33%?
Asda's profit declined due to CEO Allan Leighton’s price-cutting strategy aimed at making the supermarket 5% to 10% cheaper than rivals in order to regain market share.
2What impact has the price-lowering strategy had on Asda's sales?
Sales excluding fuel fell by 3.3%, with like-for-like sales dropping 3.1%. However, like-for-like sales showed a 1.2% increase in March.
3Who owns Asda and what is its current debt situation?
Asda is majority owned by TDR Capital and the Issa brothers, with Walmart retaining a 10% stake. Its net debt was 3.1 billion pounds at the end of December 2025.
4How has Asda performed in terms of market share and customer satisfaction?
Despite improvements in price and product availability, industry data shows Asda continues to lose market share, though customer satisfaction and availability have improved.
5What operational changes did Asda undertake recently?
Asda separated its IT systems from former owner Walmart in August, reducing previous operational disruptions, but online grocery sales remain slightly affected.