Asda’s latest financial results have highlighted the business risks associated with large-scale IT implementations. Problems with the supermarket’s implementation of an SAP system, following its separation from Walmart, illustrates the unknown factors that can scupper IT projects.
The Annual report and consolidated financial statements for the year ended 31 December 2025, from Bellis Finco, the holding company for the supermarket chain, said the retailer had achieved “significant progress on the journey to rebuild Asda”, which included a cutover of the IT running its stores and depots from legacy Walmart technology to new Asda systems through the completion of its Project Future programme.
“In Project Future we have replaced legacy technology end-to-end across the business,” the company said.
However, the results showed a near-£1bn pre-tax loss, partly due to “exceptional costs” of £284m incurred as a result of Project Future.
“Non-underlying costs incurred relating to Project Future in the current year included non-recurring costs incurred in stores and distribution centres in the post-conversion period, including inventory loss and other operating costs incurred as a result of temporary disruption to replenishment processes,” said the financial statement.
According to Damian Fessey, managing partner at consultancy Oxford8, writing on LinkedIn, the problems were due to Asda’s move from the Walmart instance of SAP to its own, combined with an upgrade to a newer version of the SAP enterprise resource planning (ERP) system.
The Asda financial results said: “Our progress was interrupted in Q3 as we completed the cutover of the larger stores and depots to SAP and began to trade in a converted and standalone retail systems environment. The impact on systems stability proved more material and prolonged than we had expected, resulting in reduced availability in-store and increased friction in the online customer journey.”
As part of Project Future, Asda had sought external help to establish an SAP centre of excellence to focus on long-term sustainability and accelerated access to specialists for issue resolution – yet when Asda switched over to the new system, it experienced major problems with stock replenishment, which impacted sales.
Asda chairman Alan Leighton said in November 2025 that he felt the problems were “self-inflicted”.
Separating from Walmart’s IT
In 2021, SAP announced that the supermarket chain expanded its strategic partnership with the ERP software provider with a plan to use Rise with S/4Hana on Microsoft Azure as the digital core for its future platform.
The decision was driven by the retailer’s transition from legacy IT, enabling it to embark on an accelerated digital transformation strategy to better manage its end-to-end business operations covering commercial, procurement, supply chain, logistics and retail operations.
Along with Rise, the retailer’s overall business transformation project covering the switchover from Walmart’s IT, via Project Future, also included SAP Business Technology Platform for data integration, SAP Ariba for procurement and Blue Yonder for order management.
In 2022, Blue Yonder announced that its order management system, powered by machine learning and artificial intelligence, would enable Asda to optimise its entire customer journey, from online purchase to delivery.
At the time the retailer selected SAP, Asda’s then CIO, Carl Dawson, said: “We want to work with the very best retail technology providers in the market with proven experience and world-class capabilities.”
With regards to the SAP project, he said: “Through Rise with SAP, we are looking forward to building on our strategic relationship and achieving Asda’s goals for now and the future in the dynamic retail industry.”
The retailer also worked with Resulting IT, a programme delivery partner which has Asda as a reference customer and, according to the Asda case study published on its website, claims the project provided “a clear exit path from Walmart systems and a transition services agreement”.
Despite bringing in such a wide range of external expertise, Asda still experienced major disruption once the systems went live, according to its FY25 filing – although the precise reasons for the problems have not been revealed.
Sales were impacted due to disruption following the substantial completion of Project Future affecting on-shelf availability and customer experience online through increased website friction, said the financial statement. The disruption lasted until November 2025, by which time the number of major incidents related to Project Future technology had reduced back to what Asda called “sustainable levels”.
Understanding the risk at an executive level
The lesson learned from the outage is that there is now executive recognition of the business risk posed by IT failures. In the FY25 filing, Asda noted that a number of critical systems are now cloud-based, using software-as-a-service applications, which it said increases the importance of effective management of IT suppliers.
The retailer said it is focused on strengthening its technology team’s skills to improve and advance core technologies, and it is also optimising and upgrading technology infrastructure and platforms to strengthen resilience, which includes investment to enhance internal infrastructure and upgrade legacy systems across the organisation.
