Asda is facing a sell-off of its bonds and loans as investors in the retailer grow worried that accelerating revenue declines will threaten its turnaround.

A fall in the price of the supermarket’s traded debt that started in November has picked up pace in 2026, the Financial Times reported, after industry data revealed that Asda was the biggest loser of Christmas in the sector. 

A €1.3bn loan issued by the grocery giant in 2024 has fallen to a record low of 88 cents on the euro, a decline from 96 cents in November.

Additionally, €700mn of the company’s bonds maturing in 2031 have dropped to 94 cents on the euro, after trading at par as recently as October.

Debt traders raised concerns over the business’s high leverage and declining performance, despite its investment in price cuts.

One high-yield bond investor said: “Asda cuts prices, yet every month they still post negative like-for-like sales when grocery inflation is running hot.”

An Asda spokesperson said: “We are in the early stages of a transformation and are making progress where it matters most for our customers by helping them save money on their grocery shop.

“Independent price comparisons showing Asda is the lowest-priced traditional supermarket undercutting competitors’ base and loyalty prices. This focus on value is beginning to be reflected in stronger volumes over recent periods.

“Asda has a sustainable capital structure with the majority of its borrowings secured into the next decade. Our strong balance sheet and underlying free cash flow generation means we can comfortably cover current and future debt obligations.”

Asda saw sales decline ahead of the festive trading period, making it the only major supermarket to experience a revenue drop before Christmas.

The grocery giant’s sales fell 4.3% over the 12 weeks to 30 November, Worldpanel data revealed. Asda’s market share also sunk 0.9% to 11.5% over the quarter.

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