Supermarket leader Asda faced a significant setback with a 7% drop in sales, according to industry experts NielsenIQ (NIQ). The grocer, headquartered in Leeds, also experienced a decline in market share from 12.2% to 10.9% over the last 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 challenges. Under the leadership of veteran chief Allan Leighton, who returned as executive chairman last year, the company aimed to revive its fortunes. Despite announcing major price cuts in March to boost trade, Asda’s sales continued to decline sharply.
While Asda planned to be 5% to 10% cheaper than competitors like Tesco, Sainsbury’s, and Morrisons, its sales performance didn’t reflect the strategy’s success. In contrast, Tesco and Sainsbury’s witnessed sales growth of 4.5% and 5.2% respectively during the same period. Aldi also posed a threat to Asda with a market share of 10.3%.
An Asda spokesperson acknowledged the ongoing challenges but expressed confidence in the company’s strategy to enhance its customer proposition and competitiveness. Despite the setbacks, Asda launched a festive advertising campaign featuring The Grinch to attract customers during the Christmas season.
NielsenIQ projected that UK households would spend £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 that consumers are prioritizing affordability this holiday season by making strategic savings on their regular shopping to indulge in festive treats.
Overall, Asda remains committed to its turnaround efforts and aims to reaffirm its position as the UK’s most affordable traditional supermarket.