Asda has reported its first sales growth in over two years, signaling a tentative recovery for the UK supermarket chain amid ongoing economic challenges. In the three months ending June 30, the Leeds-based grocer recorded a 0.2 percent increase in like-for-like sales excluding fuel, marking a key milestone as it seeks to regain market share lost in recent years.

The modest rise follows a 2.3 percent decline in like-for-like sales during the previous quarter. Food sales also fell by 1.9 percent in the second quarter, contributing to total revenues of £5.1 billion. Asda’s executive chairman, Allan Leighton, who returned to lead the company in late 2024 after previously heading it 25 years ago, described the latest figures as “psychologically important” and indicative of progress in the ongoing turnaround effort.

Leighton emphasized that the supermarket is still in the “foothills of recovery,” estimating the business to be about a third of the way through a planned three- to five-year turnaround. He acknowledged that the process is lengthy but necessary given the scale of the challenges Asda faces. “There’s still more work to do as we focus on building a stronger business for the long term,” he said.

The company attributes some of the recent progress to competitive pricing strategies and improvements in its online shopping experience, which include partnerships with Ocado and Amazon. Asda is also experimenting with technology such as shelf-monitoring cameras to enhance store efficiency.

Despite these efforts, the broader economic environment remains a significant headwind. Asda’s finance director, Michael Gleeson, pointed to geopolitical uncertainty and the cost-of-living crisis as factors continuing to strain consumer spending and confidence. He further urged the incoming Labour government to reconsider business tax and regulatory increases, such as National Insurance and business rates, arguing that these could impede investment and economic growth.

Asda’s cautious optimism reflects the challenges facing many retailers navigating difficult market conditions while attempting to reposition themselves in a competitive landscape. With signs of stabilizing sales and growing customer interest, the supermarket aims to continue its recovery trajectory over the coming years.