Supermarket giant Asda has said the economic backdrop has weighed on consumer budgets but sales are set to return to growth for the first time in two years.
The private equity-backed retailer said it is nevertheless still in the “foothills of recovery” as it continues to push ahead with a major turnaround plan.
Boss Allan Leighton indicated the company is roughly a third of the way through the turnaround process.
He told reporters he believes the group is roughly where he expected the retailer to be after taking over the reins in late 2024, having returned to Asda’s top job after previously leading it 25 years earlier.
“We have been very consistent with the fact the turnaround will take between three and five years,” Mr Leighton said.
“Whenever someone says that they think it is taking a long time, I make it clear that for something of this scale, this is just how long it takes.”
It came as Asda reported that sales returned to growth for the current quarter for the first time in two years.
Like-for-like sales for the first seven weeks of the current quarter, excluding fuel, have risen by 0.2%.
The company said it is therefore narrowing the gap against its largest supermarket rivals, having seen its share of the UK market decline in recent years.
On Friday, the Leeds-based chain reported revenues of £5.1 billion for the second quarter of 2026.
It said like-for-like sales were 2.3% lower for the quarter, with food sales down 1.9% for the period.
Mr Leighton added: “We saw momentum build in Q2 with stable market share, and we’re now seeing that translate into more customers choosing Asda.
“While this progress is encouraging, we are still in the foothills of recovery.
“There’s still more work to do as we focus on building a stronger business for the long term.”
Michael Gleeson, Asda’s chief financial officer, said: “A challenging geopolitical and economic backdrop continued to weigh on consumer confidence and household budgets during Q2.
“Despite these pressures, our continued investment in price and the overall customer proposition means we continue to make steady progress in our turnaround journey.”
In May, Asda revealed plans to partner with retail technology giant Ocado in a bid to improve its online grocery service for customers.
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