Under Archie Norman's "Renewal" programme Asda averted financial collapse. But the broker sees a levelling off in margins as cost pressures mount and underlying sales growth slows from almost 10 per cent to the industry norm of 4 per cent in 1998/99.
There is also a feeling that Asda's unexpected bid for Granada's Welcome Break motorway service stations gives the lie to the food retailer's claim that its core business was performing well.
Sector watchers will recall that Iceland rather let the cat out of the bag on current trading a year ago when it lined up an approach for Littlewoods, the privately owned pools and department store empire. Iceland's shares have been in the dog-house ever since.
While Asda's problems are nowhere near as serious, NatWest reckons the shares are worth closer to 100p than the 113.5p, down 3.25p, they closed at last night.
The FTSE 100 retreated from a new trading high of 4362.4 to close 1.3 lower at 4356.1 in response to a weak opening on Wall Street.
Rank Group, under new chief executive Andrew Teare, led the way among blue chips, adding 27p to 442p on the back of full-year results and plans to buy back up to 10 per cent of its shares.
Also sought was British Airways, up 16.5p to 634.5p on good profits from Australian airline Quantas, where BA has a 25 per cent stake.
Centrica, the supply arm of the old British Gas, was the most active stock for the second day running with 177 million shares changing hands as US investors bailed out. The shares, though, finished 3.75p firmer at 70.25p.
Reed International remained in demand, rising 47p at one stage before settling a net 10p higher at 1157.5p after the publisher took the took the unusual step of saying it knew of no reason for the recent share price strength.
De La Rue, the banknote printer, had another storming session, ending 25.5p higher at 661p. The shares have risen by almost a quarter in the last couple of months amid steady institutional buying. Several stories help explain the rise. One is technical, with chartists noting the positive formation of a "golden cross" where the line showing the 38-day moving average crosses the 200-day moving average line on the up.
Another relates to the planned introduction of the euro in 1999. This is likely to more than mop up capacity among European rivals, leaving De La Rue free to enjoy better margins in its core third world markets.
P&P's good run continued, the shares adding 2.5p to 221.5p despite vice- chairman Peter Fisher cutting his stake in the computer services group. Mr Fisher sold 2.1 million shares at 220.5p on Wednesday, leaving him with 5.68 million, or a 7.03 per cent stake.
The deal marks another symbolic chapter in P&P's evolution. Mr Fisher and his former wife Pam founded the company in 1979 as a distributor of computers The initials of their christian names gave the company its moniker.
But last week a more broadly based P&P announced plans to change its name to Skillsgroup as it unveiled a 14 per cent increase in full-year profits.
Micro Focus, the software specialist, slipped 5p to 1082p even though the Prudential picked up 81,000 shares to take its stake to 10.4 per cent from 9.9 per cent.
Preston North End scored a 5p gain to close at 550p after winning a lottery grant to build a football museum at the club's Deepdale ground. The project is expected to cost more than pounds 7m, the bulk of which will come from the grant.
But Manchester United remained out of favour, falling another 13p to 637.5p despite consolidating its lead at the top of the Premier League with an away win at Arsenal on Wednesday night. Leeds United, stuffed 4-0 by Liverpool, fared better as shares in parent company Caspian held at 38p.
Shares in EasyNet, the Internet service provider, advanced 4p to 66.5p. Losses in the year to December widened to pounds 970,000 but the company said the number of corporate and consumer customers rose by over 400 per cent.
Fish and chip shop chain Harry Ramsden's served up a 2.5p gain to close at 347/5p as a director, M J Barnes, raised pounds 688,000 by exercising and selling options on 200,000 shares at 3.44p, leaving him with a 1.43 per cent stake.