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Daily Mail
29-05-2025
- Business
- Daily Mail
Asda boss shrugs off plunging sales and vows to press ahead with price war
The boss of Asda shrugged off tumbling sales as he cranked up a price war, and said he doesn't care about market share. Executive chairman Allan Leighton said his mission was seeing 'green shoots' after it slashed the price of thousands of products and improved stocks. Sales at the beleaguered supermarket chain, whose George at Asda fashion range is modelled by Yasmin Le Bon, plunged 5.9 per cent to £5billion for the three months to March 31. The news came a day after industry data from market researchers Kantar showed Asda's share of the market fell to 12.1 per cent – its lowest on record going back to 2011. But retail veteran Leighton, 72, said: 'Market share today means nothing to me. We're in a turnaround situation, restoring a business to an enduring proposition. 'That will take time. We're building a business for the future, not for the next five weeks.' He blamed the decline on a lack of price competitiveness and having 'had the worst availability in the industry'. But 'real progress' had been made since he became chairman in November, and it now has the 'best pricing position'. The grocer aims to be 7-10 per cent cheaper than rivals within the next year. Asda's market share has shrunk since its takeover four years ago by private equity firm TDR and the billionaire Issa brothers.
The Guardian
29-05-2025
- Business
- The Guardian
Asda unlikely to see growth before year end at earliest, says supermarket boss
Asda is unlikely to see growth before the end of this year at the earliest, the supermarket's chair, Allan Leighton, has said, as sales continue to fall despite price cuts and more stock on its shelves. Meanwhile, Aldi, which is closing the market share gap with Asda, put further pressure on its rival by announcing significant expansion plans across the UK. Underlying sales at Asda fell 3.1% in the four months to the end of April compared with the same period a year before – despite on-going food inflation which has helped all other rivals grow. However, Leighton said Asda, which has been struggling since a £6.8bn buyout by Blackburn brothers Mohsin and Zuber Issa and the private equity firm TDR Capital in 2021, was seeing 'green shoots' as the pace of decline had eased from the previous quarter. 'We have made real progress but there is a long way to go,' he said. Total sales fell nearly 6% to £5bn in the period after the UK's third largest supermarket invested millions of pounds in keeping down the price of key items and updating its IT systems as part of an £800m-plus handover from systems run by its former owner Walmart. 'We are still down and we have to get up,' Leighton said. 'We could price up and do promotions to get the sales line up, but this is a three- to five-year plan and we are creating something enduring.' The veteran retailer, who returned to Asda in November last year after a two-decade gap, said he remained confident the company could return to growth. He said sales of the group's George clothing ranges were outperforming the wider market, and were up 3.5% in established stores. Petrol forecourt and convenience store sales were also up after fuel prices sharpened. After ditching a price-matching scheme with Aldi and Lidl this year, the group plans to return to offering everyday low prices under the banner Asda Price by the end of next year rather than a plethora of cut-price offers. 'The plan is, towards the end of the year, to return to top-line growth and get more units in people's baskets, up the price gap [with rivals] and improve availability,' Leighton said. The former Co-op Group and Royal Mail boss said Asda was now between 3% and 5% cheaper than its mainstream rivals on average, although still dearer than the fast-growing Aldi and Lidl. His pledge to invest in cutting prices wiped £4bn off the value of its main listed rivals in March. He said on Thursday that the group had already reduced the price of 10,000 products and was 'inflating behind the rest of the market by about 2%'. However, Asda has been losing share to both its bigger traditional rivals – Tesco and Sainsbury's – and the discounters, which are rapidly opening stores and gaining new shoppers searching for bargains amid on-going pressure on household bills. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Aldi is now within one percentage point of overtaking Asda to become the UK's third biggest supermarket, according to analysts at Kantar, and is already there on some narrower measures. On Thursday, Aldi, which Kantar says increased sales by 6.7% in the three months to 18 May, unveiled plans for 40 more stores this year. The German-owned retailer expects to open a similar number in each of the next two years. Giles Hurley, the boss of Aldi in the UK, said the business was committed to remaining the cheapest whatever its rivals did. 'The price gap with the competition is as big as ever,' he said. Leighton said Asda could fight back as it was a 'very different proposition' to both the discounters and mainstream supermarkets – with George clothing a key part of the plan. 'George is going to be the number one brand by volume in clothing in the next three years,' he said. Leighton has said it could take five years to turn around the supermarket group, which is now controlled by TDR after it bought out Zuber Issa last year, while his brother, Mohsin, stepped back from effectively running the retailer but retains a 22.5% stake.
Telegraph
28-05-2025
- Business
- Telegraph
Asda market share hits record low as crisis deepens
Asda's share of the grocery market has fallen to a record low in a fresh setback for the struggling supermarket. New figures show that Asda's market share fell to 12.1pc in the 12 weeks to May 18, which is the lowest level since Kantar started collecting data in 2011. That is despite Allan Leighton launching a price war to kickstart turnaround efforts at Asda, which has lost swathes of customers to the likes of Tesco, Aldi and Lidl. Lower prices helped the retailer record its best performance in a year, although this did not prevent sales from falling by 3.2pc over the period. This means that Asda was once again the only supermarket to record a drop in sales in the 12 weeks, with the likes of Lidl and Ocado posting growth of 10.9pc and 14.9pc respectively. Even Marks & Spencer and the Co-op reported improved grocery sales despite suffering cyber attacks. Asda has struggled ever since it was bought by private equity firm TDR Capital and the Issa brothers in 2021, as the debt-fuelled £6.8bn takeover hindered attempts to keep up with lower-priced competitors. The supermarket chain has also been left without a permanent chief executive when Roger Burnley stood down in August 2021. Mr Leighton was drafted in as chairman last year to revive the retailer's fortunes, since ploughing investment into increasing store opening hours while also reintroducing Rollback – its price-cutting campaign. However, the retail veteran faces an uphill battle, as data shows that Asda's market share has fallen from 15.0pc in 2021 to 12.3pc. Meanwhile, the latest figures also revealed that grocery price inflation is now at its highest level since early 2024, hitting 4.1pc over the period. It comes after retailers warned they would have to increase prices as a result of Labour's Budget, which hit them with increased National Insurance (NI) contributions and lowered the threshold at which those contributions are paid. The tax raid kicked in last month. Fraser McKevitt, head of retail and consumer insight at Kantar, said: 'This latest jump in grocery price inflation takes us into new territory for 2025. 'Households have been adapting their buying habits to manage budgets for some time, but we typically see changes in behaviour once inflation tips beyond the 3pc to 4pc point as people notice the impact on their wallets more. 'Own label lines are ones to watch, with premium own label, in particular, being the fastest growing part of the market since September 2023.' Total grocery sales grew by 4.4pc in May, Kantar added, while Ocado was the fastest-growing retailer year on year with sales growth of 14.9pc. Elsewhere, both Lidl and Aldi's market share reached fresh highs, hitting 8.1pc and 11.1pc respectively. Tesco also grew its share to 28pc, while Sainsbury's slipped from 15.3pc to 15.1pc.
