Asda Struggles to Regain Market Share Amid Prolonged Sales Decline

Asda has experienced a significant plunge in its share of the UK grocery market, heightening scrutiny of chief executive Allan Leighton and his efforts to revive the supermarket chain. The grocer’s sales fell sharply by 3.9 percent during the twelve weeks to 2 November, marking the twentieth consecutive month of decline, according to recent figures from Worldpanel. Asda’s market share has now slipped to 11.8 percent, down from 12.7 percent a year earlier and its lowest level since Worldpanel began collecting data in 2011.

In 2021, when the business was acquired by private equity firm TDR Capital and Mohsin and Zuber Issa, market share stood at 14.8 percent. This downward trend presents a considerable challenge to Mr Leighton, who returned to Asda as chief executive last November, pledging to lead the supermarket’s revival. He has described the turnaround effort as akin to ‘climbing Everest’ and set an estimated timescale of three years for the strategy to bear fruit.

Leighton has enacted a range of measures, including significant price reductions and greater investment in product availability. The relaunch of Asda’s “Rollback” programme was designed to attract price-sensitive shoppers and recapture lost ground. However, analysts remain sceptical; Clive Black of Shore Capital notes that the ongoing sales weakness indicates substantial brand damage over recent years. There is also uncertainty about whether Asda underestimated the intensity of competitive responses from rival chains.

Reports suggest that consumer perception of Asda’s prices remains less favourable compared to competitors. Sainsbury’s recently highlighted YouGov survey data indicating Asda’s lagging position on price perception amongst British shoppers, further undermining efforts to reassure the public and investors about the retailer’s direction.

Leighton has also sought to build unity among staff, most notably through a series of team-building initiatives at the company’s Leeds headquarters, turning the car park into a makeshift Everest basecamp complete with rock-climbing facilities. While internal staff engagement has been a priority, this has yet to translate into customer growth.

Despite these challenges, Asda maintains that progress is being made on price competitiveness and product availability and remains committed to its strategy. The company asserts it now offers lower prices than its major competitors, even in the face of rising food inflation. Asda’s leadership recognises that market share recovery will be gradual, but expresses confidence in the group’s future proposition for British consumers.