‘It’s not where we want to be’: Asda sales shrink as supermarket rivals eat into market share
Asda’s sales have dropped again after it continued to lose market share to its supermarket rivals, according to new figures.
Revenue in its second quarter of its financial year was down 2.2 per cent, with a 5.3 per cent like-for-like decline, as its sales slump accelerated.
Competitors like Morrison’s, Tesco and Sainsbury’s have been slowly taking Asda’s market share.
Last month’s industry data from Kantar found that Asda had 12.7 per cent of the UK grocery market over the three months to July 7, shrinking from a 13.6 per cent share of the market a year earlier.
“Like for like in the second quarter, it’s not… where we want it to be,” chief financial officer Michael Gleeson told Morning Wire.
“We also know that there are some areas where we can and need to improve,” he added. “We’re focusing on availability. We’re focusing on customer perception, and we’re focusing on our trade plan.”
A Lidl push
The grocer – along with the other main UK supermarkets – has been forced to reduce prices to compete with Aldi and Lidl recently.
Asda has invested £70m in price reductions, Gleeson said.
“I think the big four – collectively and individually – have done a significantly better job in the last 18 to 24 months and [they have] hopefully given customers fewer and fewer reasons to leave,” Gleeson said.
The grocer cut prices by an average of 17 per cent on more than 280 items to get their prices in line with German discounters.
Asda’s ‘business transformation‘
Asda has grown from just over 600 shops to 1,200 stores and food-to-go outlets since TDR Capital and the Issa brothers took control in June 2021, the grocer said. This is the “largest [change] in its history”, the company added.
Asda has invested £30m in its staff – which will increase the number of staff on checkouts and improve cleaning at stores – as well as £50m in a store upgrade programme.
Earlier this year, workers at multiple Asda superstores went on strike to protest cuts to working hours, poor quality training and management issues.
It plans to focus on “enhancing availability” of products, as well as “driving increased use” of its loyalty app Asda Rewards.
It remains to be seen whether these changes will pay off in the second half of the year.
Mohsin Issa, Asda co-owner, said: “As we move forward, we remain committed to maintaining our value credentials, enhancing the product offer, and executing our long-term growth strategy to build an even stronger Asda for our customers and communities.”
The update comes two months after Mohsin Issa’s brother Zuber exited Asda, selling his 22.5 per cent stake to TDR Capital to focus on his petrol forecourts business.