Asda returned to a pre-tax profit in its 2023 financial year, despite losing market share to its grocery rivals over the period, as it vowed to build a “bigger and better” business.
The UK’s third largest supermarket’s results for the year to the end of December 2023 showed a pre-tax profit of £180m, up from a £432m loss in 2022. Adjusted EBITDA jumped 24% after rent to £1.078bn driven by 5.4% like-for-like sales growth, which it said was driven by “its continued focus on value for customers, and the impact of strategic acquisitions in the convenience sector”.
The retailer said the outcome also reflected an increase in operating profit and a partial reversal of previous impairment provisions.
Asda revealed it notched up record online grocery sales in 2023, delivering 39 million orders with a sales value of £3.2bn, and ended the year with a 20.8% share of the grocery ecommerce market.
Online now accounts for 18% of its total grocery sales, an increase of 8% since 2020.
Asda chief financial officer Michael Gleeson said: “We are investing to build a bigger and better Asda bringing our heritage in value to more customers across the UK.
Our priority remains growing the Asda business for the long-term through diversifying our offering to ensure customers can shop with us when and how it best suits them. Our online business is key part of our omnichannel offering and it is pleasing to see the investments made in price, service and to expand our digital footprint continue to resonate with customers and drive sales.”
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Last week, fresh data from Kantar revealed Asda’s market share has plunged by almost 1 percentage point in the past year, from 13.7% to 12.8% as sales continued to fall over the last 12 weeks.
In the 12 weeks to 9 June, the grocer’s sales fell 4% as the gap between it and Aldi, which overtook Morrisons to become the UK’s fourth-largest grocery chain back in 2022, continues to shrink.
The supermarket’s net debt at the end of the first quarter of 2024 remained at £3.8bn, as it said it was “fully committed to further deleveraging”. In May, it refinanced more than £3.2bn of its debt.
Back in 2021, Mohsin and Zuber Issa and private equity firm TDR Capital bought 90% of Asda from Walmart in a £6.8bn deal.
Earlier this month Zuber Issa sold his stake in the supermarket chain to co-owner TDR Capital, as the private equity firm becomes the majority owner.
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