Supermarket leader Asda faced a significant setback with a 7% decline in sales. According to industry experts NielsenIQ (NIQ), Asda’s market share dropped from 12.2% to 10.9% over the past three months.
Since its acquisition by billionaire brothers Mohsin and Zuber Issa and private equity firm TDR Capital in 2021, Asda has been grappling with challenges. The grocer, now under TDR’s control, appointed Allan Leighton as executive chairman last year to revitalize its performance. Leighton, known for his successful turnaround efforts in the 1990s, returned to steer Asda’s fortunes.
Despite announcing extensive price reductions, including the largest in 25 years in March, Asda’s sales continued to decline sharply. Asda aimed to be 5% to 10% cheaper than its main competitors Tesco, Sainsbury’s, and Morrisons by intensifying discounting using a substantial fund.
However, recent data from NIQ revealed that Asda was the sole major supermarket experiencing a year-on-year sales drop in the quarter ending November. In contrast, Tesco saw a 4.5% sales increase, Sainsbury’s grew by 5.2%, and Aldi closely trailed Asda with a 10.3% market share.
An Asda spokesperson acknowledged the ongoing challenges but expressed confidence in the company’s strategy and customer offerings. Asda emphasized improvements in availability both online and in stores, along with a focus on competitive pricing to enhance its value proposition.
In a bid to attract customers, Asda launched a festive advertising campaign featuring The Grinch. The move coincided with NIQ’s prediction that households would spend £20 billion on Christmas groceries, peaking at £5.7 billion the following week.
Mike Watkins, head of retailer and business insight at NielsenIQ, noted a trend of budget-conscious Christmas shopping among consumers. He highlighted a shift towards strategic spending to accommodate special treats and indulgences during the holiday season.