Supermarket leader Asda encountered a significant 7% decline in sales, while industry analysts at NielsenIQ (NIQ) reported a further drop in the company’s market share from 12.2% to 10.9% over the last three months.
Following its acquisition by billionaire brothers Mohsin and Zuber Issa and private equity firm TDR Capital in 2021, Asda has faced challenges. The grocer, now under TDR’s control, appointed veteran chief Allan Leighton as executive chairman last year to steer a revival, leveraging his successful track record from the 1990s.
Despite unveiling plans in March for its largest price reductions in 25 years to stimulate business, Asda experienced a sharp sales decline. The company announced intentions to become 5% to 10% cheaper than key competitors such as Tesco, Sainsbury’s, and Morrisons by utilizing a “war chest” for increased discounts.
However, recent data from NIQ revealed that Asda was the sole major supermarket to witness a year-on-year sales decrease in the three months leading up to November’s end. In contrast, Tesco and Sainsbury’s saw sales rise by 4.5% and 5.2%, respectively. Meanwhile, discount retailer Aldi closely trailed Asda with a market share of 10.3%.
A spokesperson from Asda emphasized the ongoing turnaround efforts, highlighting improvements in online and in-store availability, as well as a strategic focus on delivering excellent value compared to competitors. The company aims to reestablish itself as the UK’s most cost-effective traditional supermarket.
In a bid to attract customers, Asda launched an extensive Christmas advertising campaign featuring The Grinch. This move coincided with NIQ’s projection that households would spend a total of £20 billion on Christmas groceries this year, with a peak spending of £5.7 billion expected next week.
Mike Watkins, head of retailer and business insight at NielsenIQ, noted a trend of consumers seeking affordability this festive season, opting for prudent spending and targeted savings on weekly groceries to afford special treats and indulgences for their families in December.
