Asda, the prominent supermarket chain, faced a challenging situation with a notable 7% decline in sales. Market analysts from NielsenIQ (NIQ) reported a drop in Asda’s market share from 12.2% to 10.9% over the last quarter.
Following its acquisition by billionaire brothers Mohsin and Zuber Issa alongside TDR Capital in 2021, Asda has been undergoing significant changes. Under the leadership of executive chairman Allan Leighton, who orchestrated a successful transformation in the 1990s, Asda is striving to regain its competitiveness.
Despite implementing a strategy in March to introduce substantial price reductions, including its most extensive discounts in 25 years, Asda experienced a sharp sales decrease. The company aimed to become 5% to 10% cheaper than its main competitors, such as Tesco, Sainsbury’s, and Morrisons.
However, recent data from NIQ revealed that Asda was the sole major supermarket to witness a year-on-year sales decline in the three months leading up to November. In contrast, Tesco saw a sales increase of 4.5% and Sainsbury’s of 5.2%. Additionally, the discount retailer Aldi posed a significant challenge to Asda with a market share of 10.3%.
An Asda spokesperson acknowledged the time required for the company’s turnaround efforts to take effect. They highlighted improvements in availability both online and in stores, emphasizing their commitment to offering competitive prices compared to rivals. The spokesperson expressed confidence in Asda’s strategy to reestablish itself as the UK’s most affordable traditional supermarket.
As part of its customer engagement strategy, Asda launched an extensive Christmas advertising campaign featuring The Grinch to attract shoppers during the festive season. Concurrently, NIQ projected that UK households would spend £20 billion on Christmas groceries, with a peak of £5.7 billion anticipated for the upcoming week.
Mike Watkins, the head of retailer and business insight at NielsenIQ, noted that consumers are prioritizing affordability this holiday season, making careful spending decisions to allocate funds for special treats and family indulgences in December.