Asda Plans Major SKU Reduction for Growth

Reducing Product Range for Better Efficiency

Asda has announced plans to cut around 6,000 SKUs in an effort to improve supplier volumes. This Asda SKU reduction aims to streamline product offerings and enhance sales performance. The retailer intends to reduce its current 30,000 SKUs to between 24,000 and 25,000 within the next year.

Focused Category Reviews Underway

Executive chairman Allan Leighton confirmed this strategy during a recent post-trading call. He stated that chief commercial officer Kris Comerford will lead the category-by-category review to achieve this reduction.

“We’re adjusting both that and the way the product is displayed on shelves,” Leighton explained. The company believes this change will help suppliers sell more units per SKU, boosting volume sales.

Strengthening Asda’s Turnaround Plan

Leighton emphasized that improving availability remains a key priority. He stressed the importance of “getting the range right, the price right, and the availability right.”

He added that Asda has already increased availability from 90% to 94%, with a target of reaching 98.5% — a level last achieved in 2001.

Positive Growth Despite Sales Dip

Despite a slight drop in sales, Asda experienced a 5.8% increase in adjusted EBITDA after rent, reaching £1.14bn for the year ending 31 December 2024. Improved margins in non-food categories, especially within the George clothing line, contributed significantly to this growth.

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