Asda, the UK’s third-largest supermarket, continues to struggle as new data reveals a significant drop in sales. The latest figures from Kantar show a 5.2% decline in sales for the 12 weeks ending January 28th, compared to the same period last year. This makes Asda the only major retailer to experience a fall during this period, further intensifying the pressure on Chairman Allan Leighton to turn the tide.
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Kantar’s data paints a stark picture for Asda, with its market share shrinking to 12.6% at the end of January, down from 13.6% a year earlier. This decline follows a disappointing Christmas trading period, the worst since 2015, highlighting the ongoing challenges faced by the retailer. In contrast, competitors like Tesco and Sainsbury’s saw sales growth of 4.2% and market share increases to 28.5% and 15.9%, respectively.
Leighton’s Return and the “Rollback” Strategy
Allan Leighton, a seasoned retail veteran who previously led Asda from 1996 to 2001, returned as Chairman last year, replacing Lord Rose. His mission: to revitalize the supermarket by focusing on price cuts and improved product availability, a strategy reminiscent of Asda’s successful “Rollback” campaign in the 1990s.
In a recent move, Leighton announced significant price reductions on over 4,000 products, with an average drop of 25%. This renewed emphasis on value aims to attract price-conscious shoppers and position Asda as the most affordable traditional supermarket. Leighton has acknowledged the long road ahead, cautioning that a full recovery could take up to five years. Asda’s struggles stem from its 2021 acquisition by private equity firm TDR Capital and the Issa brothers.
Leadership Vacuum and the Search for a CEO
Compounding Asda’s challenges is the absence of a permanent CEO since Roger Burnley’s departure in 2021 due to strategic disagreements with TDR. Mohsin Issa briefly assumed day-to-day operations but stepped back in 2024 amid mounting pressure over performance.
The search for a new CEO has recently been relaunched, but industry experts suggest a fresh approach may be necessary to attract a suitable candidate. The leadership vacuum further complicates Leighton’s efforts to steer Asda back to profitability.
Asda’s Response and Future Outlook
An Asda spokesman emphasized the company’s commitment to value, noting recent sales improvements and market share gains compared to the previous Kantar period. The spokesman also highlighted the “Rollback” initiative, positioning Asda as the cheapest traditional supermarket. However, the significant sales slump reported by Kantar underscores the depth of the challenges facing Asda. The success of Leighton’s strategy and the appointment of a new CEO will be crucial in determining the supermarket’s future. The coming months will be critical for Asda as it navigates a competitive landscape and strives to regain its footing in the UK grocery market.
