ASDA has warned that the money it will spend to reduce prices for customers and improve the availability of products will be lowering profits this year.
The third British supermarket struggled to follow its competitors, losing market share to its larger competitors such as Tesco and Discounters Aldi and Lidl last year.
After reporting his annual income, ASDA Executive President Allan Leighton said the grocer targeted that his prices were five to 10% cheaper than his competitors in the future.
He said the supermarket sought to invest more in price reduction and put more staff in the workshop, but recognized that customer confidence in the brand would take time.
ASDA revealed on Friday that sales, excluding fuel, dropped by almost 1% to 21.7 billion pounds Sterling last year.
Leighton said that supermarket sales were “disappointing”, but that his profits being up 6% in 2023 to 1.1 billion sterling pounds were “ok-ish”.
“Obviously, there is one or two things that we must correct,” he added. “Our price, our availability and our range architecture – that has started everything … We are starting to make progress.”
“This is an investment warning, not a profit warning,” said Leighton.
Asda has more than 580 supermarkets, nearly 500 convenience stores and 769 parising.
He has been without permanent director general since 2021. His co -owner Mohin Issa left the management of the supermarket last year.
In January, Mr. Leighton, who returned to Asda in November after 20 years, where he was previously Managing Director, launched large prize decreases – reintroducing the “Rollback” promotion which was used for the first time in the 1990s.
But Leighton said that price reduction would not be a “quick solution” to recover the supermarket on a stronger basis.
“The only way we have been able to rebuild profit is sales growth,” he added.
