Supermarket leader Asda faced a significant challenge with a 7% drop in sales, according to industry experts NielsenIQ (NIQ). The grocer, based in Leeds, also experienced a decline in market share from 12.2% to 10.9% over the past three months.
Since being acquired by billionaire brothers Mohsin and Zuber Issa and private equity firm TDR Capital in 2021, Asda has been striving to overcome its obstacles. Under the leadership of executive chairman Allan Leighton, who returned to the company last year, Asda aimed to revitalize its performance. Despite announcing major price reductions in March, including its largest in 25 years, Asda’s sales saw a sharp decrease.
While Asda pledged to become 5% to 10% cheaper than its main competitors Tesco, Sainsbury’s, and Morrisons, the latest data from NIQ revealed that Asda was the sole major supermarket to witness a year-on-year sales decline. In contrast, Tesco and Sainsbury’s reported sales growth of 4.5% and 5.2% respectively. Aldi, with a market share of 10.3%, posed a significant threat to Asda.
An Asda spokesperson acknowledged the ongoing challenges but expressed confidence in the strategic initiatives to enhance availability, offer competitive pricing, and position Asda as the most affordable traditional supermarket in the UK. The company’s Christmas advertising campaign, featuring The Grinch, was launched as part of its efforts to attract customers during the festive season.
As households are projected to spend £20 billion on Christmas groceries this year, with a peak of £5.7 billion expected next week, Mike Watkins from NielsenIQ noted that consumers are seeking cost-effective options and making careful choices to balance savings on routine purchases with indulgences for the holiday season.