In the 12 weeks to 21 June, Asda’s sales fell 3.5 per cent, making it the worst performer in the sector, according to figures from Kantar Worldpanel. Its performance has deteriorated from last month when the three-month decline was 2.2 per cent.
The Guardian reports that the chain’s share of the market has fallen to 16.5 per cent from 17.1 per cent three months ago, putting it dead level with Sainsbury’s, which also lost market share. The two have been vying for the number two position since Sainsbury’s reclaimed it last year for the first time in a decade.
Fraser McKevitt, Kantar Worldpanel’s head of retail and consumer insight, said Asda had been hit by a fightback from Sainsbury’s and particularly Tesco against the German discounters Aldi and Lidl, which have shaken up the grocery industry.
“There isn’t room for both Asda and Tesco to be doing OK in the market. There is a huge crossover and we know that the relationship between Asda’s success and Tesco’s success is inverse,” McKevitt said.
“Asda have been known for a very long time for low prices but with everyone else cutting prices and shouting about price it’s not so clear what the differentiation is.”
Early last year, price cuts helped Asda hold on to customers as Tesco, Sainsbury’s and Morrisons lost market share. Tesco and Sainsbury’s, under new management, have both cut prices on everyday items in an attempt to attract back customers lured away by Aldi and Lidl.
A spokeswoman for Asda said: “We’ve been under no illusion that 2015 was set to be a tough year, but we remain focused on delivering what is important – a sustainable business model for our customers, colleagues and parent over decades, not just quarters.”
Groceries are 1.7 per cent cheaper than a year ago and the number of items sold barely rose, meaning that the overall market slipped back into decline for the first time since November.
Britain’s big grocers have cut prices as customers have shopped around and defected to Aldi and Lidl. The German companies have embarked on big store opening programmes to capitalise on their popularity.
