Asda, the UK-based supermarket chain, has experienced a notable decline in its grocery market share, according to recent data from Kantar. Over the 12 weeks leading up to August 4, Asda’s sales dropped by 6%, reducing its market share from 13.7% to 12.6%. This downturn comes shortly after Lord Rose of Monewden, Asda’s chairman, publicly expressed his dissatisfaction with the company’s performance and called for a change in leadership.
Lord Rose, speaking to The Telegraph, admitted to feeling “embarrassed” by Asda’s current market position, which has seen the debt-laden group lose ground to competitors such as Tesco, Sainsbury’s, and Morrisons. He emphasized the need for Asda’s owner, Mohsin Issa, to step back from day-to-day operations, suggesting that the company requires a different type of leadership to navigate its current challenges.
Asda is predominantly owned by TDR Capital, holding a 67.5% stake, while Mohsin Issa retains 22.5%. Zuber Issa, Mohsin’s brother, sold his 22.5% stake to TDR earlier this year. Lord Rose highlighted the significant changes and expansions under Mohsin Issa’s leadership but stressed that the company now needs a different approach to improve its market standing.
In contrast, Tesco has continued to strengthen its market position, increasing its share from 27% to 27.6% during the same period. Tesco’s strategic initiatives, including an Aldi price-match scheme, have helped it fend off competition from discount retailers amid the ongoing cost of living crisis. Lidl also gained market share, rising from 7.7% to 8.1%, while Aldi saw a slight decline from 10.2% to 10%.
Morrisons reported a 1.4% increase in sales, though its market share dipped marginally from 8.7% to 8.6%. Sainsbury’s, on the other hand, achieved a 5.2% increase in sales, boosting its market share from 14.8% to 15.3%.
For investors, Asda’s current trajectory raises concerns about its ability to compete effectively in the highly competitive UK grocery market. The call for a leadership change suggests potential strategic shifts ahead, which could impact the company’s future performance and market positioning.
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