Asda Price Crackdown Hits Tesco and Sainsbury Shares Amid Renewed Supermarket Wars

Asda has reignited the fierce competition among UK grocers, triggering a significant drop in share prices for market leaders Tesco and Sainsbury’s. Fresh reports indicate that Asda is increasing pressure on its suppliers to help drive down prices in a bid to restore its fortunes and compete more aggressively with the German discounters Aldi and Lidl. The renewed price offensive follows a period of sluggish sales for Asda, intensifying the battle at the tills and sending shockwaves through the stock market.

On Tuesday, investors reacted swiftly to the news of Asda’s strategy. Shares in Tesco fell by as much as 4.5 per cent during the trading session, while Sainsbury’s shares slid by 3.4 per cent. By the close of play, Tesco had ended the day down 0.2 per cent at 448.5p and Sainsbury’s at 332.5p, also down 0.6 per cent. The move wiped hundreds of millions of pounds from the market value of Britain’s two biggest supermarkets.

The pressure on prices has been described as a major reset for the sector, with Asda relaunching its Rollback campaign, cutting fuel prices, extending store hours, and introducing new products. Allan Leighton, Asda’s chairman, has steered a large investment drive since March, aiming for Asda to be at least 5 per cent cheaper than its main rivals.

Despite the aggressive pricing, Asda continues to see declining sales, which has led market commentators to question whether the supermarket can regain its former momentum. At Asda’s annual supplier conference, attended by representatives from over 600 food and drink brands, discussions centred on greater collaboration to deliver value to customers, though Asda has denied formally asking for price reductions from its suppliers.

Sector analysts remain divided on the notion of a price war, with some describing the competition as overstated. Even so, Tesco in April adjusted its profit forecasts, citing “intense” competitive pressures from widespread price cutting, a move that could cost the chain up to £400 million in profits over the year. Tesco’s management cautioned that the challenging trading environment is likely to persist into the second half of 2025.

Asda’s management maintains that closer relationships with suppliers and continued focus on customer value represent a “shared journey” to fuel growth into 2026. With the supermarket sector in flux and market leaders bracing for ever sharper competition, shoppers look set to reap the benefits of lower prices, even as retailers and their investors navigate a more turbulent landscape.