Asda on Friday reported a decline in its annual sales for the 2024 financial year, but the retailer has seen profits rising on margin gains.
The supermarket chain said its total revenue for the year to 31 December 2024 declined by 0.8 per cent to £21.7 billion, while like-for-like sales (excluding fuel) were lower by 3.4 per cent.
Asda grew adjusted EBITDA after rent by 5.8 per cent 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.
“Everyone is focused on making Asda the number one choice again for busy hard-working families who demand value. This is what’s driving all of our actions across pricing, ranging, merchandising and every part of the business,” Allan Leighton, Asda’s executive chairman, said.
Since the year end, Asda stepped up its investment in value by bringing back its Rollback to Asda Price proposition. Launched at the end of January, with an average reduction of 25 per cent across 4,000 popular products, Rollback has now been expanded to roughly a quarter of Asda’s entire range.
Asda said it 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.
Asda delivered £0.6bn in free cashflow during FY24, which helped reduce net leverage to 2.9x (FY23: 3.0x). The retailer said this enables it to invest in new value propositions like Rollback and Asda Price.
During the year Asda refinanced the vast majority of its 2025 and 2026 maturities of £3.2bn, including paying down £0.3bn from cash. This pushed out all the remaining maturities into the next decade.
“Looking ahead we still have plenty of work to get our business firing on all cylinders again,” Leighton said.
“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.”
