Asda cuts debt as Q3 sales slow

Asda has announced that it has shaved £300m off its debt pile during the third quarter of the year while also revealing it has seen its sales slow during the period.

In the three months to the end of September, the supermarket paid off the £200m loan it took out to fund the acquisition of 132 convenience stores and petrol stations from The Co-op last year, alongside £100m other money owed.

This move cut the company’s debt from £4.2bn to £3.9bn. However, this has since risen back up to £4.6bn as a result of the company’s acquisition of the EG Group’s UK business.

This news comes as the company revealed a 2.8% increase in like-for-like sales up to £5.4bn for Q3. However, this number is down compared with the 10% sales growth the company saw in Q2 and down from 7.8% in Q1.

The supermarket giant also confirmed like-for-like food sales increased by 3.2% during Q3, compared with a year earlier, underpinned by the strong performance of its Just Essentials value range.

Asda ran two separate price drop campaigns during the quarter, lowering the prices on over 600 popular products by an average of 10%.

Michael Gleeson, Asda’s chief financial officer, said: “Asda has a sustainable capital structure, strong cash generation and clear strategy to deleverage over time, as the early repayment of the loan facility used to acquire the Co-op business demonstrates.”

Mohsin Issa, Asda’s co-owner, added: “Whether it’s through our continued focus on offering the best prices to our customers or campaigns like £1 café meals for kids and over 65s – we’re committed to supporting families through the cost-of-living crisis.

“We’re incredibly proud to build on our longstanding relationship with FareShare and work across Asda and IPL to identify surplus food within our supply chain to provide a million additional meals in the run up to Christmas.”