ASDA - comment

The pace of decline at ASDA is slowing, but there is a long way to go for ASDA. The response from competitors to price rollbacks has been muted so far, but Q2 performance will need to show that volumes are starting to improve. The potential £400m sale and leaseback deal would provide a cushion if competitors respond more aggressively. Our thesis for the SUNs remains underpinned by the value of the ASDA brand.

Underlying EBITDA levels were down 30% in Q1, with management maintaining its broad guidance of -20% for the FY. Improvement in H2 hangs on the newly established price gap (3%-5%) and availability (96% vs 90%), translating into higher volumes. Management claims this should become more visible in Q2, but this will be partly dependent on the price war not worsening.

https://www.retailgazette.co.uk/blog/2025/05/asda-sale-leaseback/