Following today’s release of ASDA’s figures for the year ending 31st December 2024; Eleanor Simpson-Gould, senior retail analyst at GlobalData, a leading data and analytics company, offers her view: “ASDA’s latest results for the year ending 31 December 2024 draw to a close what has been a tumultuous year for the grocer. In a year when the UK food & grocery market rose by 2.4%, albeit still driven by inflation, ASDA’s reported 0.8% revenue decline highlights a significant drop in market share for the grocer and places it very much in the sights of the fourth-largest retailer, Aldi. Indeed, ASDA faces another challenging year within the UK food & grocery market, and it is unlikely the grocer will regain market share in 2025. However, there are promising signs that price and store standards investment may help slow or halt further losses.
“ASDA’s financial health appears to be steadying, with the grocer reporting its net debt stabilised at £3.8bn. Additionally, the group’s adjusted EBITDA (after rent) increased 5.8% to £1.14bn, driven by improved margins and the contribution of its 356 new Express stores. The positive management of ASDA’s balance sheet, alongside £0.6bn in free cash flow, will enable ongoing investment in strategic initiatives, such as further expansion of its convenience proposition.
“Under guidance from ASDA veteran Allan Leighton, the grocer is rapidly returning to its roots. The reinstatement of ASDA’s “Rollback” pricing initiative in January 2025 is a step in the right direction and follows other grocers now retreating away from Aldi and Lidl price-matching schemes. While food inflation is creeping up again, we do not anticipate this will lead to large-scale switching to discounters, as was seen at the start of the cost-of-living crisis, and ASDA is in a prime position to ramp up its renewed price and value-led image. The grocer’s plans to shift its entire product range to a new ASDA Price by the end of 2026 is a prudent decision that will create a compelling core offer.
“Following an investment of £43m in H2 to enhance store standards and replenishment, ASDA has reported improving customer satisfaction scores in the last quarter. Though price will be ASDA’s crucial weapon to fight off encroaching market share gains by Aldi, these store enhancements are paramount to appeal to new and lapsed consumers and restore trust to its loyal customer base.”
