Asda has completed its £1 billion IT systems upgrade across all stores and food depots, but the supermarket chain says the rollout has temporarily knocked product availability and recent sales. Boss Allan Leighton described the Project Future upgrade as potentially the "biggest IT systems change, certainly in Europe, maybe ever".
The Leeds-based retailer said the massive technology overhaul led to "some temporary disruption with product availability" in stores and online as it switched from old to new systems. The company processed 50 stores per week for 10 consecutive weeks, with Leighton noting that "the collective scale of that does cause some friction, some of the systems don't run as fast as they should do".
Despite the disruption, Asda slowed the rate of its sales decline in the latest quarter. Total revenues excluding fuel decreased by just 0.2% year-on-year to £5.3 billion in the three months to the end of June, a significant improvement from the 5.9% drop in the first quarter.
Turnaround strategy shows progress
Allan Leighton, who returned to the business last year 25 years after serving as chief executive, has led a major overhaul focused on cutting prices and improving shelf availability. The strategy aims to halt declining sales and win back market share from rivals including Tesco, Sainsbury's, and German discounters Lidl and Aldi.
The supermarket has invested heavily in its Rollback programme of price reductions, with average price cuts of 22% on targeted products. Leighton said the price investment is "working for us" as it helps customers affected by food and drink inflation, which rose to 4.9% last month according to official figures.
Growth expected by year-end
Asda expects to return to like-for-like sales growth by the end of the year, despite acknowledging that price investments will drive down short-term profits. Leighton said: "We saw a clear improvement in performance during the second quarter, with volumes and like-for-like sales strengthening, driven by better product availability and our material investment in price."
The company said the £1 billion technology upgrade cost is now "largely behind us" as it pushes forward with its turnaround strategy targeting "ordinary working people and their families".
Sources used: "PA Media" Note: This article has been edited with the help of Artificial Intelligence.
