Supermarket leader Asda faced a significant challenge with a 7% decline in sales. According to industry analysts NielsenIQ (NIQ), Asda’s market share dropped from 12.2% to 10.9% in the last three months. The struggles follow the acquisition of Asda by billionaire brothers Mohsin and Zuber Issa and private equity firm TDR Capital in 2021. To revive the business, Allan Leighton was brought back as executive chairman by TDR, as he successfully led a transformation in the 1990s.
Despite announcing substantial price cuts in March, Asda’s sales continued to plummet. The company aimed to undercut competitors like Tesco, Sainsbury’s, and Morrisons by at least 5% to 10%. Asda was the only major supermarket to witness a year-on-year sales decline, while Tesco and Sainsbury’s experienced growth of 4.5% and 5.2% respectively. Aldi is also posing a threat to Asda with a market share of 10.3%.
An Asda spokesperson emphasized the ongoing efforts to enhance availability and value for customers. Asda’s strategy includes maintaining a competitive price gap with rivals to position itself as the UK’s most cost-effective traditional supermarket. To attract more customers, Asda launched a Christmas advertising campaign featuring The Grinch.
NielsenIQ projected that households would spend £20 billion on Christmas groceries this year, with a peak of £5.7 billion expected next week. Mike Watkins from NielsenIQ noted that consumers are prioritizing affordability this holiday season, making conscious decisions to save on regular expenses to indulge in treats during December.