Asda expects profit decline amid price-cut investments

Asda is launching a significant investment program aimed at reducing prices and improving product availability, which the company warns will lead to a material reduction in profits this year. Executive chairman Allan Leighton stated that the goal is to make Asda 5% to 10% cheaper than competitors like Tesco, Aldi, and Lidl as it seeks to regain market share lost over the past year, where it fell from 14.6% to 12.6%. Despite a reported 5.8% rise in adjusted EBITDA to £1.14 billion, total revenues dipped 0.8% to £21.7 billion, with like-for-like sales falling by 3.4%. Leighton emphasized that restoring customer trust and competitiveness will take time, as the supermarket aims to enhance the shopping experience and product range. The company is also focused on hiring more staff to improve service. Asda's strategies include a return to everyday low pricing under the Asda Price initiative, moving away from previous price-matching practices.