Asda's £1 billion IT upgrade has backfired dramatically, triggering a 2.8% sales decline in the third quarter of 2025. The supermarket chain's boss Allan Leighton has admitted the slump was "self-inflicted" and set the business back by six months in its turnaround efforts.
The technology overhaul caused severe disruption to product availability across stores and particularly online. Asda has been separating over 2,500 legacy IT systems from former owner Walmart since being sold to Zuber and Mohsin Issa and TDR Capital in 2021. Walmart retained a 10% stake in the business.
The transition, completed in the third quarter of this year, significantly affected stock flow between depots and stores. The company's app and website were hit particularly hard in August, leading to what Leighton described as a «poor customer experience» and impacting home delivery sales.
Recovery Timeline
Leighton outlined a sobering outlook for the chain's recovery. «It's put us back by around six months, but we now have the base to allow the business to grow,» he said. «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 timing compounds Asda's challenges as it battles to regain market share lost to rivals Tesco, Aldi and Lidl. Despite the disruption, the supermarket continued investing in price reductions throughout the quarter.
Consumer Uncertainty
Leighton also flagged broader economic concerns following Wednesday's autumn Budget. He said «consumers are confused and concerned» about the government's fiscal plans, raising questions about potential impacts on Christmas spending. However, he cautioned it was «too early» to draw firm conclusions about the crucial festive trading period.
Zuber Issa sold his stake in Asda last year, leaving the business in the hands of Mohsin Issa, TDR Capital and Walmart's minority shareholding.
Note: This article was created with Artificial Intelligence (AI).
