Asda faces a significant challenge as its market share in the grocery sector declines, with customers favouring competitors like Tesco and Sainsbury’s.
- The supermarket giant experienced a market share drop from 13.5% to 12.5%, alongside a sales decrease of 5.5% over 12 weeks ending 3 November.
- In contrast, Tesco and Sainsbury’s have gained market share and increased sales due to strategic investments in value and product offerings.
- Asda is investing £13 million in store hours to improve customer service during peak times and is undergoing a leadership transition to drive change.
- Despite competitive pressures, Aldi remains stable in its market position, achieving modest sales growth of 1.6%.
Asda’s position in the grocery sector is under pressure as it loses market share to rivals. Customers are increasingly turning to competitors, particularly Tesco and Sainsbury’s, for their weekly groceries. This shift has resulted in Asda’s market share reducing by one percentage point, now standing at 12.5% from a previous 13.5%. Sales have concurrently dropped by 5.5% over a 12-week period concluding on 3 November.
Tesco, the largest supermarket in Britain, has seen its market share grow from 27.3% to 27.9%, with sales increasing by 4.6%. Similarly, Sainsbury’s has enjoyed a 4.4% sales growth, pushing its market share up by 0.3 percentage points to a total of 15.5%. These gains are largely attributed to ongoing investments in value propositions and enhanced food offerings that resonate with cost-conscious consumers.
Addressing these challenges, Asda has announced a substantial investment of £13 million to extend store hours, aiming to deliver better customer service during the busy shopping period known as the ‘golden quarter’. With Lord Stuart Rose stepping in as chair following Mohsin Issa’s reduction in day-to-day involvement, Asda is poised for a strategic transformation intended to regain competitive strength.
Meanwhile, Aldi, firmly holding its spot as the UK’s fourth largest supermarket, maintains a steady market share of 10.4%. This stability is accompanied by a modest 1.6% increase in sales, reflecting a consistent performance amidst the competitive landscape.
Asda’s strategic investments and leadership changes are pivotal as it navigates market challenges and competitive pressures.
