Asda suffers debt selloff as Christmas gross sales hunch unnerves buyers

The crisis engulfing Asda has deepened as investors dump its debt after woeful Christmas sales sparked concern about the viability of its turnaround strategy.

In the latest setback for the troubled supermarket giant, a decline in the price of its corporate bonds has picked up pace following a dismal festive season.

A €1.3billion loan issued in 2024 has dropped from 96 cents to a record low of 88 cents on the euro since November, the Financial Times reported.

The slump suggests investors are growing increasingly concerned about Asda’s fate, after industry figures from market research group Nielsen IQ showed sales slipped 6.5 per cent last month.

All of Asda’s major rivals, such as Sainsbury’s and Tesco, saw their sales increase during the crucial festive period, with Ocado boasting double figure growth in December.

Dwindling sales: Embattled supermarket chain Asda saw its sales fall in December

Asda, which is Britain’s third largest supermarket, has lost a hefty slice of its market share since being acquired by private equity firm TDR Capital and the billionaire Issa brothers via a £6.8billion leveraged buyout in 2021.

Its market share has fallen from 12.4 per cent to 11.5 per cent in the past year, researcher Worldpanel said in December.

In June 2025, Asda posted a near £600million loss for 2024 as sales at the supermarket group fell and the cost of servicing its debt pile rose.

TDR Capital took majority control of the supermarket chain in 2024 and appointed retail veteran and former Asda executive Allan Leighton as its executive chair 14 months ago.

Leighton has hinged his turnaround strategy on luring shoppers back to the chain’s stores by reviving Asda’s position as the cheapest supermarket in the sector. He expects it could take up to five years to fully turn Asda around.

He has already overseen price cuts across around 17,000 products, equivalent to more than two-thirds of its food range.

Last week, Asda vowed to undercut the discounted prices available to loyalty card holders at Tesco, Sainsbury’s and Morrisons on more than 2,300 groceries in an attempt to wrestle back market share.

Dan Coatsworth, head of markets at AJ Bell said: ‘Prices have dropped on various Asda-linked credit instruments following a tough Christmas for the grocer. It was the runt of the litter for festive takings, compounding problems that stem back several years.

‘Asda has spent the past few years treading water trying to stay afloat while its rivals swam ahead. It has shown ambition to fight harder on price, but so far, the efforts haven’t been fruitful.’