Asda Reports Staggering £600 Million Pound Loss as Debt Burden Intensifies

The UK’s third-largest supermarket chain, Asda, has reported a devastating pre-tax loss of £599 million for the year ending 31 December 2024, marking a dramatic shift from its £180 million profit in 2023. The significant downturn comes as the retailer grapples with mounting debt obligations and operational challenges.

Sales at established stores declined by 3.4%, despite total revenue climbing to £26.8 billion from £25.6 billion, boosted by the acquisition of former Co-op stores and EG petrol forecourts. The Leeds-based retailer’s expansion strategy has been overshadowed by its struggle with substantial debt burdens and complications in transitioning IT systems from former parent company Walmart.

The company’s financial strain has been exacerbated by soaring finance costs, which jumped 38% to £611 million, primarily due to rising interest rates. Asda’s debt portfolio includes £4.9 billion in external debts, £3.8 billion in leases, and a £500 million shareholder loan, with a crucial £300 million repayment looming in February 2026.

The retailer’s IT system migration project, dubbed “project future,” has proven more costly than anticipated, consuming £310 million in 2024 alone. Total project expenses have now reached £889 million, exceeding initial projections by £89 million. The completion date has been pushed to late 2025.

Under the leadership of executive chair Allan Leighton, Asda has committed to investing heavily in price reductions and increased store staffing, acknowledging that these measures will impact profitability in the coming year. The strategy aims to reclaim Asda’s position as Britain’s lowest-priced traditional supermarket, though it may require additional debt financing to fund these competitive initiatives.

The retailer’s underlying profits, before debt payments and writedowns, showed a modest improvement, rising to £1.1 billion from £1 billion in the previous year. However, this positive indicator has been overshadowed by the broader financial challenges facing the business.