This time last year, analysts warned that Asda needed to “dig down into its soul” if it was to turn around its fortunes.
After a rollercoaster 2024 in which it struggled with debt, strikes and falling sales, the Leeds-headquartered supermarket giant was hoping the new year would begin to reveal green shoots of recovery.
Under the majority ownership of private equity giant TDR Capital, Asda has been working hard behind the scenes to right the ship and return to growth.
However, 2025 has brought bad news after more bad news.
But despite that, Dan Coatsworth, head of markets at AJ Bell, has said Asda “will go the extra mile” to regain market share, “even if that means taking a big hit to margins by going deep with a price war”.
Below, City AM looks at another eventful year for Asda and what 2026 could hold for the supermarket giant.
Asda offloads Leon before administration
The year started with Asda axing its price-matching scheme with Aldi and Lidl after just 12 months in a bid to stop “dancing to the tune of the discounters”.
In January 2024, it became the first of the UK’s ‘big four’ to offer the scheme, but replaced it with a wider “Rollback” price cuts campaign.
March brought comments from chairman Allen Leighton about how it would take time to rebuild the chain.
“Looking ahead we still have plenty of work to get our business firing on all cylinders again… we will undertake a substantive and well backed programme of investment in price, availability and the shopping experience to deliver this,” Leighton said at the time.
But in that same month, London broker Jeffries questioned whether Asda’s sales would rise quickly enough to meet the demands of its turnaround plan.
In June, City AM reported that Asda slumped back into the red after losing almost £600m in 2024, despite total sales rising by more than £1bn.
Asda posted a pre-tax loss of £599m for its latest financial year, having reported a pre-tax profit of £180.3m for 2023.
Its revenue increased from £25.6bn to £26.8bn over the same period. Excluding fuel, Asda’s sales fell from £21.9bn to £21.7bn.
September brought news that fast-food chain Leon, which Asda then owned, had cut hundreds of jobs and lost more than £8m during its latest financial year.
The business has since been sold and went into administration earlier this month.
‘Asda doesn’t seem to be the shoppers’ favourite pre-Christmas’
According to Coatsworth, Asda has been bucking the grocery industry trend in 2025, but not in the way it would want.
He said: “There were clear trends in the grocery industry during 2025.
“Comparing the start of the year to now, Tesco, Sainsbury’s, Waitrose, Ocado, Co-op and Iceland are generally static in terms of market share, yet Asda and Morrisons have continued their decline.
“Both have struggled under private equity ownership. Asda’s stores have suffered from underinvestment and the business has an inconsistent strategy, and Morrisons has been left behind as bigger rivals push hard with price-matching campaigns.
Coatsworth explained, “Asda looks like it will go the extra mile to regain market share, even if that means taking a big hit to margins by going deep with a price war.”
“It is putting pressure on suppliers to cut their prices, but Tesco is also leaning on its supply chain to offer the best prices possible.”
“Given that Tesco’s market share is more than double Asda’s, it’s not hard to guess where suppliers’ loyalty might lie. Suppliers want their products in front of as many people possible, and that’s where Tesco has the edge.”
He pointed out that “Asda doesn’t seem to be the shoppers’ favourite pre-Christmas.”
“Latest industry figures show a bleak festive showing, meaning it goes into 2026 looking like the turkey of the grocery sector,” he added.