Allan Leighton, executive chairman of Asda, reveals that the supermarket chain is facing a major crisis with declining sales and no immediate solutions, prompting a multi-million-pound investment strategy.
Allan Leighton, the executive chairman of Asda, has conveyed that the supermarket chain is grappling with a significant crisis, revealing that there is no immediate remedy as the company’s sales continue to diminish following its acquisition by private equity four years ago. During a recent announcement, Leighton stated that profits for the current financial year are projected to be “materially” lower, prompting plans to invest millions into a strategic turnaround initiative.
The profit warning has had a notable impact on Asda’s listed competitors, with shares in Tesco dropping by 8.7 per cent and Sainsbury’s declining by 7.8 per cent. Asda’s ongoing challenges are compounded by the prolonged vacancy of its chief executive role, which has been unoccupied since 2021. Leighton emphasised that there is no urgency to fill the position as he embarks on a rescue strategy for the firm.
Asda, which was sold by US retail giant Walmart to billionaire siblings Mohsin and Zuber Issa and private equity firm TDR Capital for £6.8 billion, has found itself burdened with considerable debt and experiencing a decline in market share. There is rising concern that Asda may soon lose its status as the UK’s third-largest supermarket to the German discount retailer Aldi.
Leighton, who rejoined Asda last year after previously leading the company from 1996 to 2001, noted that Asda’s sales performance over the past year had been “disappointing.” The supermarket’s revenue fell by 0.8 per cent to £21.7 billion in 2024. He clarified that there is no active recruitment process for a new chief executive, addressing speculation over the difficulty in attracting candidates to the role. Leighton stated, “I could have a new boss ‘tomorrow’,” revealing that the company has received interest from “five or six” potential candidates.
Leighton acknowledged the complexity of the current situation, asserting, “While regaining customers’ trust will take time, we will undertake a substantive and well backed programme of investment in price, availability and the shopping experience to deliver this.” In terms of financial health, Asda reported adjusted earnings before tax and other costs of £1.14 billion for the previous year, marking a 5.8 per cent increase compared to 2023. The company concluded the fiscal year with net debt amounting to £3.8 billion and around £800,000 in cash reserves on its balance sheet.
Source: Noah Wire Services
- https://www.telegraph.co.uk/business/2025/03/14/asda-is-struggling-boss-admits-slashes-profit-forecast/ – This article supports the claim that Asda is struggling, with its chairman Allan Leighton admitting the supermarket’s profits will tumble due to significant investments in store improvements.
- https://www.grocerygazette.co.uk/2025/03/14/asda-sales-decline-profits/ – This article corroborates Asda’s financial situation, including a decline in sales and a warning of softer profits due to investments in price and shopping experience.
- https://www.bloomberg.com/news/articles/2021-02-16/walmart-sells-asda-to-issa-brothers-and-tdr-capital-for-6-8-billion – This article confirms Asda’s acquisition by Mohsin and Zuber Issa and private equity firm TDR Capital for £6.8 billion, highlighting the significant financial changes Asda has faced.
- https://www.reuters.com/business/retail-consumer/asda-owner-eg-group-looks-reduce-debt-after-uk-supermarket-acquisition-2021-02-16/ – This article discusses the financial implications of Asda’s acquisition and the efforts to manage debt, which aligns with Asda’s current financial challenges.
- https://www.theguardian.com/business/2024/12/31/asda-tesco-sainsburys-supermarket-sales – This article provides context on the UK supermarket market, including sales trends and market share shifts among major retailers like Asda, Tesco, and Sainsbury’s.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative references recent financial data and ongoing challenges at Asda, indicating it is relatively current. However, the lack of specific dates for some events and the mention of a situation ongoing since 2021 slightly reduces its freshness.
Quotes check
Score:
6
Notes:
Direct quotes from Allan Leighton are included, but without specific online sources to verify their original publication date. This suggests they might be original to this piece or not widely reported elsewhere.
Source reliability
Score:
9
Notes:
The narrative originates from the Daily Mail, a well-known publication, which generally enhances reliability. However, the Daily Mail’s reputation can vary depending on the topic and context.
Plausability check
Score:
8
Notes:
The claims about Asda’s financial struggles and strategic plans are plausible given the context of recent retail challenges. However, some specifics, like the exact timeline for filling the CEO role, cannot be verified without further information.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The narrative appears to be relatively current and originates from a reputable source. While some quotes lack verification, the overall plausibility of the claims is reasonable. However, the lack of specific dates and details in some areas reduces confidence slightly.
