Asda, a leading supermarket chain, faced a significant challenge with a 7% decline in sales. Market experts from NielsenIQ reported a decrease in Asda’s market share from 12.2% to 10.9% over the past three months.
After being acquired by billionaire brothers Mohsin and Zuber Issa along with TDR Capital in 2021, Asda has been striving to overcome its struggles. The grocer, now under TDR’s control, appointed veteran executive chairman Allan Leighton last year to steer its revival efforts, leveraging his successful turnaround experience from the 1990s.
Despite implementing extensive price reduction strategies announced by Mr. Leighton in March, including the largest price cuts in 25 years, Asda’s sales continued to decline sharply. The company aimed to be 5% to 10% cheaper than its main competitors, Tesco, Sainsbury’s, and Morrisons.
However, recent data from NielsenIQ revealed that Asda was the only major supermarket experiencing a year-on-year sales drop in the last three months, contrasting with Tesco’s 4.5% sales growth and Sainsbury’s 5.2% increase. The analysis also highlighted Aldi as a close competitor to Asda, holding a 10.3% market share.
An Asda spokesperson acknowledged the challenges, expressing confidence in their ongoing strategy to enhance customer experience and value proposition. The company emphasized improvements in availability both online and in-store, as well as maintaining a competitive price advantage over rivals.
In a bid to attract more customers, Asda launched a Christmas advertising campaign featuring The Grinch. This initiative coincided with forecasts by NielsenIQ indicating a significant spike in Christmas grocery spending, expected to reach £20 billion, with a peak anticipated at £5.7 billion next week.
Mike Watkins, from NielsenIQ, noted that consumers are prioritizing affordability this holiday season and are making conscious choices to save on regular expenses to allocate funds for special treats and indulgences in December.