Asda bounced back to a pretax profit in the 2023 financial year, despite losing out in market share to rivals in the same period.
The supermarket giant reported for the financial year ending December 2023 that it had achieved a pretax profit of £180m, a notable jump from its pre-tax loss of £432m in 2022.
The grocer said its performance was driven by a rise in operating profit and a partial reversal of previous impairment provisions.
Asda also recorded record online grocery sales in 2023, delivering 39 million orders with a sales value of £3.2bn and ended the year with its highest ever online grocery market share of 20.8%.
This was 2% ahead of the third-ranked supermarket and Asda’s strongest market share performance since June 2020 as online now accounts for 18% of its total grocery sales – an increase of 8% since 2020.
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The retailer said the strong online performance was driven by continued investment in price, quality and innovation.
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.”
The latest financial results come as Asda has published an adjusted EBITDA of £1.078bn for 2023, with total sales, excluding fuel, jumping 7% to £21.9bn, despite its weaker performance against rivals.
Just last week, new figures from Kantar showed that Asda’s market share has plunged by almost 1 percentage point in the past 12 months – from 13.7% to 12.8% – as sales continued to decrease over the last 12 weeks.
In the 12 weeks to 9 June, the grocery retailer’s sales fell a further 4%, allowing for the gap between it and Aldi, which overtook Morrisons to become to become the UK’s fourth-largest grocery chain back in 2022, to close even further.
Industry analysts told Reuters that Asda’s performance and competitiveness had been dampened by its significant debt pile.
Interest costs rose to £225m last year and as of end-March 2024 its net debt stands at £3.8bn, following Mohsin and Zuber Issa and private equity firm TDR Capital bought 90% of Asda from Walmart in a £6.8bn deal in 2021.
