Asda Reports Flat Food Sales Amid CEO Transition
Asda reported a 0.1% dip in comparable food sales while appointing David Potts as CEO to combat declining market share and high debt.
The United Kingdom's third-largest supermarket, Asda Stores Limited, reported that comparable food sales excluding fuel fell by 0.1% for the 13 weeks ending September 30. While the result nearly ends a two-year streak of quarterly declines, the retailer continues to lose market share, dropping from 14.3% in early 2021 to 11.3%.
Total revenues rose 3.1% to £6.5 billion, a growth driven largely by increased fuel prices. The company saw a 6.9% increase in online grocery sales, which it attributed to the revamped Asda Rewards loyalty program. Chief Financial Officer Michael Gleeson stated that the third-quarter performance reflected the company's current strategy.
These financial results coincide with the appointment of David Potts as Chief Executive Officer. Potts has already begun implementing operational changes, instructing store managers to increase their presence on the shop floor. The company remains under pressure from a high debt burden following its 2021 acquisition by TDR Capital and brothers Mohsin and Zuber Issa, as well as a failed IT overhaul. Asda continues to face stiff competition from Tesco, Sainsbury's, Aldi, and Lidl.
