Supermarket giant Asda faced a significant challenge with a 7% drop in sales, as reported by industry experts NielsenIQ (NIQ). Over the last three months, Asda’s market share decreased from 12.2% to 10.9%.
Following its acquisition by billionaire brothers Mohsin and Zuber Issa and TDR Capital in 2021, Asda has been striving to overcome its struggles. With TDR now in control, the grocer brought back veteran chief Allan Leighton as its executive chairman to lead a revival effort, leveraging his successful turnaround strategies from the 1990s.
Despite announcing plans in March for its most extensive price reductions in 25 years to stimulate business, Asda’s sales saw a sharp decline. The company aimed to be 5% to 10% cheaper than competitors like Tesco, Sainsbury’s, and Morrisons by utilizing a “war chest” for increased discounting.
In contrast to Asda’s sales decline, Tesco experienced a 4.5% growth, and Sainsbury’s saw a 5.2% increase in sales during the same period. Aldi, a discount retailer, is closely trailing Asda with a 10.3% market share.
An Asda spokesperson acknowledged the ongoing challenges but expressed confidence in the company’s strategic progress and customer offerings. Despite admitting room for improvement, Asda remains committed to establishing itself as the UK’s most budget-friendly traditional supermarket.
To attract more customers, Asda launched a Christmas advertising campaign featuring The Grinch. The move coincided with NIQ’s projection that households would spend £20 billion on Christmas groceries this year, reaching a peak of £5.7 billion next week.
Mike Watkins, NielsenIQ’s head of retailer and business insight, noted a trend of consumers prioritizing affordable shopping this holiday season, focusing on smart spending to indulge in family treats during December.