Asda under pressure as market share hits new low

THE owners of Asda are facing increasing scrutiny after the supermarket's market share reached a new low, with sales plunging this summer, reported the Guardian.

In the three months leading up to 10 August, Asda’s sales dropped by 6.4 per cent, equating to over £2 billion in lost annual revenue. This decline made Asda the only one among the traditional "big four" supermarkets to see a fall in sales, according to industry analysts NIQ.

Asda, the UK’s third-largest supermarket chain, saw its market share dip by 1.3 percentage points to just 11.8 per cent, barely keeping it ahead of Aldi, which holds the fourth spot.

The poor sales performance has added pressure on Asda’s major shareholder, Mohsin Issa, who has been urged by the supermarket's chairman, Lord Stuart Rose, to step down. Rose, who recently expressed his disappointment with Asda's performance, expects Issa to step back later this autumn.

The latest figures from NIQ present an even bleaker picture than those from grocery market analyst Kantar, which showed a 6 per cent drop in Asda's sales for the three months ending on 4 August. This decline took Asda’s share of the grocery market to 12.6 per cent, the lowest in at least 13 years.

Retail analyst Clive Black from Shore Capital noted that Asda, which had been building market share since the 1980s, has now reached a new low, with further declines likely unless improvements are made.

Asda is struggling to keep up with its larger competitors, including Tesco, Sainsbury’s, and Morrisons, as well as the rapidly growing discounter Lidl, all of which reported sales increases ranging from 2.1 per cent to 9.6 per cent.

Meanwhile, Aldi, the only other major chain to lose market share alongside Asda, saw its sales slip by 0.7 per cent due to a slowdown in new store openings and increased price-matching from the big four supermarkets. Despite this, Aldi still holds 10.4 per cent of the market, just 1.4 percentage points behind Asda.

Mike Watkins, NIQ’s head of business insight, highlighted that the grocery market grew at its fastest pace this year during the four weeks leading up to 10 August, driven by a mini heatwave that boosted outdoor dining. Sales of barbecues, sun cream, ice cream, and hay fever remedies all saw significant increases during this period.

Asda, currently searching for a new chief executive after a turbulent period, attributed its market share loss to an "extensive period of transformation."

“We recognise and accept that there are areas that need improvement and have set out the priorities we need to focus on to address that challenge. As part of that, we are investing an additional £30m in our stores during the second half of the year to improve customer service and product availability," a spokesperson was quoted as saying.

“Customers have already noticed a significant improvement since we invested in hours, our stor

According to reports, Asda plans to invest an additional £30 million in stores during the second half of the year to enhance customer service and product availability.

The company revealed that a recent refinancing of most of the group’s £3.9bn debts had provided it with a "robust capital structure" for the next decade and the flexibility to continue investing in the business and reduce debt.