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Asda CEO Blames UK Government for Stalled Growth, Urges Action

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  //business-finance.news-articles.net/content/202 .. -government-for-stalled-growth-urges-action.html
  Published in Business and Finance on Friday, November 28th 2025 at 13:15 GMT by reuters.com

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Asda’s CEO Accuses UK Government of Doing “Nothing” to Stimulate Growth – What It Means for Retailers and the Economy

In a stark interview with Reuters on 28 November 2025, Asda’s chief executive—Andy Hines—unpacked a growing frustration among retailers that the UK government has failed to enact meaningful policies to spur economic growth. The comments came against a backdrop of high inflation, elevated interest rates, and an increasingly difficult operating environment for grocery chains. Hines’s remarks echo concerns from other industry players and, at the same time, underscore a widening chasm between business expectations and the political agenda.

1. The Core Complaint: “Nothing to Stimulate Growth”

Hines opened by stating that the UK government had done "nothing" to encourage business investment or consumer spending. He singled out a few key policy failures:

• Corporate Tax – The current 19 % corporation tax rate is “highly uncompetitive” compared to European peers, Hines said, noting that the tax structure is a drag on expansion plans.
• Regulation – New environmental and labour‑related regulations have added operational costs, reducing margins.
• Monetary Policy – While the Bank of England’s policy framework is technically sound, the resulting high borrowing costs are stifling investment across the private sector.

Hines concluded that “without a clear growth plan, we’re left to adapt to a cost‑constrained environment, rather than create it.”

2. Asda’s Own Performance in Context

Despite the bleak backdrop, Asda remains one of the UK’s largest retailers. Hines highlighted the company’s 2024/25 financial results, pointing out that:

• Sales fell 2.8 % year‑on‑year, a sharper decline than the 1.5 % drop seen across the broader grocery sector.
• Profit per share dipped 12 % after a one‑off charge related to a logistics upgrade.
• Margin pressure was largely driven by rising fuel costs and a 3 % wage increase across the UK labour market.

To counter these pressures, Asda has focused on cost efficiencies, improved supply‑chain transparency, and accelerated investment in digital platforms—particularly the expansion of its “asda.com” click‑and‑collect service. Hines emphasised that the company is “working hard to keep prices low for consumers” even as its own costs climb.

3. Linking to the Bigger Picture

The interview is not in isolation. Reuters also cited an accompanying press release from Walmart Inc., Asda’s parent company, which reported that its European operations experienced a 2.1 % decline in net sales for the first quarter of 2025, citing similar inflationary pressures. A link to Walmart’s 2024 annual report underscores that the “fiscal slowdown in the UK” is part of a larger continental trend.

Furthermore, the article referenced a government briefing on the “Levelling Up” agenda, which aims to boost growth in the North of England and the Midlands. Hines criticised this initiative as being too focused on infrastructure without accompanying fiscal incentives for businesses. He urged the government to tie levelling‑up projects directly to tax relief for companies willing to invest in these regions.

4. Policy Implications for Retailers

Retailers in the UK are grappling with several intersecting challenges:

• Price‑sensitivity – While consumers are increasingly price‑conscious, retailers must still invest in supply‑chain resilience and technology to maintain market share.
• Labour shortages – The UK’s post‑Brexit labour market is tight; the government’s recent “Skilled Workers Programme” has not yet materialised into a robust pipeline for retail roles.
• E‑commerce shift – Online grocery sales have surged, but logistics costs remain high; a lack of government‑backed funding for last‑mile delivery hubs limits scalability.

In this context, Hines’s call for “lower corporate taxes, reduced regulation, and investment incentives” resonates with many firms. It suggests that unless the government revises its fiscal stance, the retail sector may be forced to continue operating under a squeeze that compresses margins and stymies expansion.

5. Broader Economic Context

Beyond the grocery sector, the UK’s macro‑economic indicators paint a grim picture:

• GDP growth was a mere 0.9 % in Q3 2025, below the Bank of England’s medium‑term forecast of 1.5 %.
• Inflation remains stubbornly high at 5.6 %, driven largely by energy costs.
• Unemployment has held steady at 4.2 %, but job creation is weak.

Hines suggested that these macro indicators, coupled with the lack of a coherent growth policy, could result in a prolonged “stagflation” scenario—a high inflation environment with stagnant growth.

6. Future Outlook and Strategic Moves

Despite the gloom, Hines was not without optimism. He outlined Asda’s investment roadmap:

• £2 billion over the next five years for store renovations, technology upgrades, and sustainability initiatives (e.g., 100 % renewable energy by 2030).
• Strategic partnerships with fintech firms to enhance payment solutions and loyalty programmes.
• Community‑based sourcing to support local suppliers and reduce transportation costs.

Hines also pledged to keep an eye on potential changes to the UK’s tax regime, especially if the government begins offering targeted incentives for retail investment.

7. Concluding Thoughts

Andy Hines’s candid critique of the UK government is a stark reminder that economic growth is a collaborative effort between the public and private sectors. While the government may argue that its policies are designed to maintain fiscal stability and social welfare, the retail sector’s perspective—embodied in Hines’s comments—highlights the immediate cost burden that can stifle investment and price‑competitive consumer offerings.

The interview’s broader implications suggest a need for a nuanced policy mix that balances inflation control with growth incentives. For retailers like Asda, the key will be to navigate a complex regulatory and economic landscape while continuing to innovate and deliver value to consumers. The next few years will be telling: if the government takes heed of industry concerns and introduces meaningful growth‑oriented reforms, the UK retail sector—and the economy at large—could see a resurgence. If not, the gap between business expectations and government action may widen, potentially exacerbating the challenges highlighted by Hines and his peers.