Asda has acknowledged that a failed £1bn IT upgrade, which disrupted product availability on shelves, has delayed the business's recovery efforts "by six months" as it attempts to reverse its declining performance.
Chief executive Allan Leighton, who rejoined the supermarket group last year, described the sales decline over the previous three months as "self-inflicted", caused by disruption during the transition from a legacy system connected to former owner Walmart. The boss also warned that consumers are "confused and concerned" in the wake of the autumn Budget.
The Leeds business disclosed that like-for-like sales fell by 2.8% during the third quarter of 2025 following "severe disruption" related to the IT transition. The retailer had been separating more than 2,500 legacy IT systems and migrating them to its own platforms since being acquired by Zuber and Mohsin Issa and private equity firm TDR Capital from Walmart in 2021. Walmart retains a 10% stake in the business.
Zuber Issa disposed of his shareholding in the company last year. Asda confirmed it completed the transition during the third quarter of this year, though the process particularly affected stock flow between depots and stores.
This resulted in "inconsistent availability levels across stores and particularly online", Asda said. Mr Leighton said these problems created a "poor customer experience" and affected its app and website in August, damaging sales of home deliveries.
He said: "It's put us back by around six months, but we now have the base to allow the business to grow."
Availability is back to where it was in June, operational issues are reducing and performance in recent weeks is improving, but we do not expect to re-establish our Q2 2025 position until Q2 of 2026," the company stated. Despite this, Asda continued to invest in price reductions over the quarter.
Since Mr Leighton took over late last year, the company has been focusing on pricing in an effort to return to growth, after losing market share to competitors including Tesco, Aldi and Lidl in recent years. This investment has been made against a backdrop of increased food inflation over the past year and pressure on consumer confidence.
Mr Leighton expressed that "consumers are confused and concerned" following Wednesday's Budget, but said it is "too early" to know whether this will impact spending over Christmas.
