Supermarket powerhouse Asda faced a challenging period with a notable 7% decline in sales. Market analysts from NielsenIQ (NIQ) also highlighted a decrease in Asda’s market share from 12.2% to 10.9% over the past three months.
Following its acquisition by billionaire brothers Mohsin and Zuber Issa along with private equity firm TDR Capital in 2021, Asda has been striving to overcome its challenges. Under the leadership of executive chairman Allan Leighton, who orchestrated a successful turnaround in the 1990s, Asda has been implementing strategies to rejuvenate its performance.
Despite announcing significant price cuts – the most extensive in 25 years – back in March to stimulate trade, Asda experienced a sharp drop in sales. The grocer aims to position itself as 5% to 10% cheaper than its main competitors, such as Tesco, Sainsbury’s, and Morrisons.
Recent data from NIQ indicated that Asda was the only major supermarket to witness a year-on-year sales decline in the three months leading up to November. In contrast, Tesco and Sainsbury’s saw sales growth of 4.5% and 5.2%, respectively. Discounter Aldi also posed a competitive threat to Asda with a market share of 10.3%.
An Asda spokesperson emphasized the ongoing efforts to enhance availability both online and in-store, reestablishing the brand’s reputation for offering great value compared to rivals. Despite acknowledging the need for further improvements, Asda remains confident in its strategy to regain its position as the UK’s most cost-effective traditional supermarket.
In a bid to attract more customers, Asda launched a Christmas advertising campaign featuring The Grinch. This initiative coincided with NIQ’s projection that households would spend a total of £20 billion on Christmas groceries this year, with a peak of £5.7 billion expected next week.
Mike Watkins, head of retailer and business insight at NielsenIQ, noted that consumers are prioritizing affordability this holiday season, opting to save on regular expenses to afford special treats for their families in December.
