Asda has updated its performance for the year to 31 Dec 2024 announcing total revenue down by 0.8% to £21.7bn in FY24, while like-for-like sales (excluding fuel) were lower by 3.4%.
Asda grew adjusted EBITDA after rent by 5.8% to £1.14bn during the year, driven by improved gross margins, particularly in non-food reflecting the strength and scale of its George business, as well as a full year of profit from the 356 Asda Express convenience stores and forecourt sites acquired from EG Group.
Allan Leighton, Asda’s Executive Chairman, has his work cut out for him but thinks the return of its Rollback prices campaign should help. He said: “Following the return of Rollback in January, our price advantage has strengthened and customers’ perceptions of the value we offer is starting to improve. We will move thousands more products to Rollback at regular intervals this year.
“Looking ahead we still have plenty of work to get our business firing on all cylinders again. 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. This will materially reduce our profitability this year, which we expect to reverse as our market share recovers and improves over time.”
Asda remains a highly cash generative business and the supermarket’s net debt at the end of December 2024 was £3.8bn (FY23 £3.8bn) – net of more than £800m cash on the balance sheet.
Since the year end, Asda stepped up its investment in value by bringing back its iconic Rollback to Asda Price proposition. Launched at the end of January, with an average reduction of 25% across 4,000 popular products, Rollback has now been expanded to roughly a quarter of Asda’s entire range.
Asda will add thousands more products to Rollback at regular intervals during the year as part of its strategic shift to move its entire product range to a new low ‘Asda Price’ by the end of 2026.
Michael Gleeson, Asda’s Chief Financial Officer, said: “We have a clear plan to reset our value offering and meet the demands of our current and future customers – as proven by our improving satisfaction scores.* *While it is encouraging that our market share performance is stabilising, we know what we need to do to regain our sector leading value position, and we are executing against this. Asda is a highly cash generative business and our strategy is backed by a robust balance sheet as we continue to make progress on our deleveraging commitments, having pushed all of our near-term debt maturities into the next decade.”
