Asda has reported a 2.8% drop in like-for-like sales for Q3, with revenue (excluding fuel) at £5.1 billion. The retailer stressed that this was the result of its IT separation project, Project Future, which it described in its Q3 trading update as “one of the largest and most complex IT projects undertaken by any European retailer.” While systems have now stabilised and availability is back above 95%, Asda does not expect to regain its Q2 position until mid-2026.
Walmart sold Asda to the Issa brothers and TDR Capital in February 2021 for £6.8 billion, retaining a minority stake. The new owners’ strategy – dubbed the “Formula for Growth” – aims to modernise Asda’s operations, expand convenience formats, and strengthen its digital capabilities. The migration away from Walmart systems caused stock-flow issues and a poor online customer experience, hitting its Grocery Home Shopping business particularly hard.
Asda’s turnaround plan focuses on price leadership, convenience expansion, and digital improvements. Its Express convenience format continues to outperform the market, and the retailer is investing in store refurbishments and supplier partnerships to strengthen its competitive edge.
Executive chairman Allan Leighton struck a positive note in the Q3 2025 trading update, acknowledging that the retailer has not yet completed its turnaround plan but focusing on its successes. “We said it would take three to five years to turn Asda around,” he stated. “We made good progress in the first half of the year against our ‘Formula for Growth’ with the best availability in eight years, a notable price gap versus competitors and a return to like-for-like growth.”
Battling it out on price
Once considered a lower-cost ‘big four’ supermarket, Asda’s position has been shaken by the arrival of budget competitors Lidl and Aldi, as well as competition from ‘traditional’ rivals Sainsbury’s and Morrisons. Its market share stands at 11.6%, down from 14.8% at the time of its sale to the Issa brothers and TDR Capital. Analysts warn that Aldi may overtake Asda as the UK’s third-largest grocer within months.
In response, Asda has introduced price cuts on 956 grocery items and reinstated its Rollback scheme ahead of Christmas, aiming to be at least 5% cheaper than rivals. However, Lidl has pledged £250 million to cut prices on 1,000 items, Aldi has invested £300 million to address food inflation, and Morrisons has reduced prices on 650 products.
With food inflation forecast to peak at 5.7–6% in December, and consumers tightening budgets and seeking bargains ahead of Christmas, the intensified focus on value and loyalty marks one of the most challenging Christmas trading periods in recent memory for UK supermarkets. Having completed Project Future, Asda is now relying on its improvement efforts to compete against low-cost rivals while working to strengthen customer engagement and recover momentum by 2026.
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