LONDON, U.K.: British supermarket group Asda reported a near £1 billion annual loss after cutting prices to win back shoppers and absorbing substantial one-off costs.

Asda, Britain's third-largest supermarket chain after Tesco and Sainsbury's, posted a pretax loss of £989 million (US$1.3 billion) for 2025, widening from a loss of £599 million in 2024, according to annual accounts filed on June 19.

Total sales, including fuel, fell 3.4 percent to £25.9 billion.

The results reflect Executive Chairman Allan Leighton's strategy to make Asda between 5 percent and 10 percent cheaper than its traditional rivals as the company attempts to rebuild its customer base and reverse a decline in market share.

Leighton returned to Asda in November 2024, more than two decades after his earlier stint as chief executive. In March 2025, he warned that the price-cutting plan would "materially reduce" profit that year and said it could take as long as five years to rebuild the business.

Asda is majority owned by private equity firm TDR Capital, while former owner Walmart retains a 10 percent stake.

The reported loss included £656 million in one-off costs. These included £284 million linked to Asda's IT separation from Walmart, a process now complete, and a £344 million non-cash impairment following a revaluation of the retailer's property portfolio.

"The reported loss does not reflect the underlying financial strength of the business and continued powerful cash generation," an Asda spokesperson said.

The spokesperson said Asda ended the year with £1.3 billion in cash and total liquidity of £2.1 billion. The company said most of its borrowings are secured for the next decade.

Net debt stood at £3.1 billion, down £500 million from the previous year.

Asda had previously reported that its underlying earnings, measured as adjusted EBITDA after rent, fell 33 percent to £764 million in 2025.

The retailer also reported another decline in quarterly underlying sales last month, although the pace of the fall had slowed. Industry data released at the same time showed Asda continuing to lose market share.