## Asda's Sales Growth Slows Down
Asda, the UK's third-largest supermarket chain, reported a slowdown in sales growth for the fourth quarter of its latest financial year. This presents challenges for its owners, who are striving to improve sales while reducing costs.
Like-for-like sales increased by 2.2% in the fourth quarter, contributing to an annual sales growth of 7.1% to £21.9 billion in 2023. However, this growth is significantly lower than previous quarters, with sales rising by 2.8% in the third quarter and 9.6% in the second quarter.
The slowdown in sales growth comes as Asda faces increased competition from rivals and a challenging economic environment. The cost of living crisis has put pressure on household budgets, leading consumers to become more price-conscious.
Despite the sales slowdown, Asda has seen a rise in customers using its loyalty app, Asda Rewards. Approximately half of all sales are now linked to the program. Additionally, the company has passed on commodity price deflation to consumers and reduced prices on over 800 everyday products.
Asda's free cash flow increased by 31%, enabling the repayment of a £200 million loan facility and reducing leverage. Adjusted earnings rose by 24%, reaching £1.078 billion.
## Leadership and Ownership Changes at Asda
Asda's annual results coincide with reports of significant changes in its leadership and ownership structure. Zuber Issa is reportedly in talks to sell his 22.5% stake in Asda to TDR Capital, which would increase its stake to about two-thirds. Meanwhile, Mohsin Issa is expected to step down from the joint CEO position at EG Group, the petrol forecourts empire he built with his brother.
These changes reflect a broader reset within Asda and its parent company, EG Group, amid evolving market dynamics and strategic priorities. The new leadership and ownership structure will likely shape Asda's future direction and strategy.