Asda boss slams tax hikes: ‘Businesses have to be allowed to invest’
Asda chair Allan Leighton has warned that the Government must change the way it thinks about growth or risk a stagnating economy.
Ahead of Asda’s quarterly results – where the grocer reported its fourth consecutive quarter of improving like-for-like sales – Leighton said that the company has a “simple philosophy… if you want growth, you have to invest.”
“Growth isn’t driven by government. Growth is driven by organizations and companies and people. And if they can’t invest, then we will not grow, no matter what the government says or does,” he said.
Employers have struggled to turn a page on Chancellor Rachel Reeves’ £40bn tax raid at last year’s Autumn Budget, with the Confederation of Business Industry (CBI)’s monthly survey finding that owners have planned for a drop in business activity in each of the last 10 months.
Earlier in August, a group of retailers – including Asda – wrote to Chancellor Rachel Reeves, arguing that her government’s tax policies could undermine its key promise to raise living standards.
The retailers claim they are being forced to raise prices in the face of mounting costs, and that additional taxes will accelerate food price inflation, which is already climbing.
Green shoots at Asda
Leighton stepped into the role of executive chair last November, and has spearheaded a turnaround at the grocer, aiming to bring the supermarket back to its roots.
Last year, Asda faced declining sales, as well as strikes and multiple executive team shake-ups.
But Leighton’s strategy appears to be paying off. Total revenue declined just 0.2 per cent in the second quarter, marking a 2.9 per cent improvement on the first quarter and Asda’s best quarterly performance since the start of 2024.
“We’re nine months into the three to five year plan, and we’re roughly where I’d expect us to be,” he said.
Asda has also finally completed Project Future, with stores now operating on our new systems.
The completion of the project marks its official separation from Walmart, with the latter selling its majority stake to the Issa brothers and TDR Capital in 2022.
“We expect to exit the year in like-for-like growth as we continue our investment in price to protect our customers from inflationary pressures.
“As we’ve said from the outset, transforming Asda will take time, but we remain confident in the direction of travel and the long-term potential of the business,” Leighton said.