British Retail Giant Focuses on Price Reductions and Customer Loyalty to Regain Market Share
British supermarket chain Asda has reported a slight decline in total revenue for the fiscal year ending December 31, 2024, with figures dropping from £21.9 billion in 2023 to £21.7 billion ($28.05 billion) in 2024.
Despite the revenue dip, the retailer achieved a 5.8% increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) after rent, reaching £1.14 billion. The rise in profitability was attributed to improved gross margins, particularly in non-food sectors, and a full year of profits from the 356 Asda Express convenience stores acquired from EG Group.
Asda’s Growth Strategy: Price Cuts and Customer Engagement
Asda is aggressively implementing strategic initiatives aimed at regaining its position as a top choice for price-conscious shoppers.
📉 Key Financial Figures:
✔️ Revenue fell to £21.7 billion ($28.05 billion) in 2024
✔️ EBITDA after rent increased by 5.8% to £1.14 billion
✔️ Like-for-like sales (excluding fuel) declined by 3.4%
✔️ Net debt remained stable at £3.8 billion
🛒 Key Business Drivers:
✔️ Expansion of the George clothing line
✔️ Integration of Asda Express stores into the core business
✔️ Refinancing of £3.2 billion in debt maturities
Asda executive chairman Allan Leighton emphasized the company’s commitment to offering customers the best value, stating:
🗣️ “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.”
Asda Invests in Competitive Pricing and Operational Improvements
To address shifting consumer preferences and intense competition in the UK retail sector, Asda has relaunched its ‘Rollback to Asda Price’ initiative, offering significant price reductions across thousands of popular products.
📌 Major Pricing Initiatives in 2025:
✔️ January 2025: Revitalized Rollback program with an average 25% price cut across 4,000 essential products
✔️ Big Jan Price Drop: Further reductions on frequently purchased items
✔️ Long-Term Pricing Strategy: Gradual transition to a new low ‘Asda Price’ across the entire product range by 2026
Additionally, Asda has allocated an extra £43 million to store enhancements in the second half of 2024, aimed at improving stock replenishment and overall customer experience.
Leighton highlighted the impact of these pricing adjustments:
🗣️ “Following the return of Rollback in January, our price advantage has strengthened, and customers’ perceptions of the value we offer are starting to improve. We will move thousands more products to Rollback at regular intervals this year.”
Financial Restructuring and Profitability Concerns
Asda is also focused on managing its debt and improving financial stability amid tighter economic conditions.
💰 Key Financial Moves:
✔️ Refinanced £3.2 billion in debt maturities for 2025 and 2026
✔️ Paid down £0.3 billion from cash reserves
✔️ Extended all remaining maturities beyond 2030
However, despite improved margins and a stable debt position, Asda has issued a profit warning, indicating that its aggressive strategy will impact short-term earnings.
Leighton acknowledged the challenges ahead, stating:
🗣️ “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 program of investment in price, availability, and the shopping experience. This will materially reduce our profitability this year, which we expect to reverse as our market share recovers and improves over time.”
What’s Next for Asda?
Asda’s strategic overhaul will be closely watched in the coming months, as it competes with rivals like Tesco, Sainsbury’s, and Aldi in an increasingly competitive UK grocery market.
🔍 Key Areas to Watch:
✔️ Customer response to aggressive pricing strategies
✔️ Market share performance versus competitors
✔️ Debt management and financial stability
✔️ Further operational improvements in stores and online channels
Asda’s long-term success will hinge on its ability to balance profitability with customer value, ensuring that its pricing initiatives drive long-term loyalty rather than short-term sales boosts.
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