Asda’s recovery journey has hit another stumbling block, as the supermarket giant reported its weakest festive performance in nearly a decade. New data from analyst firm Kantar revealed that Asda’s sales during the crucial 12-week Christmas period fell by 5.8 per cent, the steepest drop among all major UK supermarkets.
Spending in Asda stores fell to £4.59billion, a sharp decline from £4.87billion during the same period last year, Mirror reports. The chain, which is the UK’s third-largest supermarket, last experienced a Christmas slump of this magnitude in 2015 under former CEO Andy Clarke.
This latest blow has also seen Asda’s market share drop from 13.5 per cent to 12.5 per cent in December. The disappointing figures come as Allan Leighton, Asda’s newly appointed chairman, faces mounting pressure to reverse the chain’s fortunes.
Leighton, who stepped into the role in November 2022, has pledged to “restore Asda’s DNA” by focusing on cutting prices to attract more customers. Asda has been grappling with challenges since its acquisition by private equity firm TDR Capital and the Issa brothers, Mohsin and Zuber, in February 2021.
The sudden departure of its former CEO, Roger Burnley, in 2021 left a leadership void that further complicated the chain’s recovery efforts. Leighton has already warned that turning Asda around could take up to five years, with his immediate priority being the recruitment of a strong chief executive.
Mohsin Issa, the co-owner and boss of Asda, used to run the chain’s daily operations but resigned from his position in September of last year.
Despite the grim Christmas results, Asda has shown signs of slight improvement in recent weeks. Preliminary figures from Kantar suggest the chain experienced a modest 0.4 per cent sales rise in the four weeks leading up to December 29.
Clive Black, of Shore Capital, said the latest figures were “dreadful” for Asda, adding: “The magnitude of the market share loss year on year also speaks volumes.” He said: “Leighton is, to me, a force for good, even at the age of 71. But he will need a much stronger executive team to execute whatever plans he has for stabilisation and recovery.”
The decline in Asda’s market share comes against the backdrop of soaring inflation across the grocery sector. Kantar reported that supermarket inflation climbed to 3.7 per cent in December, up from 2.6 per cent in November, marking its highest level since March 2024.
A spokesperson for Asda said: “We are focused on providing great value for hard-working families and this is already making a difference, with visible improvements in sales and market share in the four-week Kantar period ending Dec 29.
“We have started this year as we mean to go on by reducing prices on thousands of products in store and online by an average of 26 per cent as part of our big January price drop.”
Don’t miss the latest news from around Scotland and beyond.Sign up to our daily newsletter.