Yahoo Finance Asda only Big Four supermarket to suffer fall in sales
Asda has suffered a slump in grocery sales, making it the only one of the traditional “Big Four” supermarkets in Britain to lose market share over the last three months.
Shoppers spent £4.5bn at Asda in the 12 weeks to April 14, according to new figures from Kantar, representing a drop of 0.4pc.
The supermarket’s market share dipped from 14pc to 13.4pc over the period.
The fall comes as Asda battles under the weight of billions of pounds of debt accumulated through its 2021 takeover by the Blackburn-born Issa brothers.
Asda had net debts of £3.8bn at the end of last year and was forced to pay £220m in finance costs. It plans to raise £2.6bn to refinance part of its debts, with marketing documents for a €1.05bn term loan currently being circulated.
MPs have questioned whether the debt burden has prevented Asda from providing the best prices to customers, a suggestion co-owner Mohsin Issa has denied.
The supermarket began price matching products with Aldi and Lidl in January in an effort to win back customers. Finance chief Michael Gleeson this week said the policy would “make sure we are competitive again”.
However, the Kantar figures suggest the strategy is yet to yield results.
Major rivals have all grown their sales over the same period. Consumer spending at Sainsbury’s was up 6.8pc, Tesco improved by 5.9pc, while Morrison’s increased by 3.8pc. Customer spending at Lidl, meanwhile, grew by 9.1pc.
Both Tesco and Sainsbury’s improved their market share, to 27.4pc and 15.3pc respectively, while Morrison’s remained broadly flat.
On Monday, Asda reported underlying profits of more than £1bn in 2023, up by 24pc, although the figure did not include interest payments on its debt pile.
Across the industry, grocery sales increased by 3.3pc over the four weeks to April 14, driven by strong spending on Easter eggs. Confectionary sales topped £100m over the seven days to Easter Sunday, a record driven by the soaring price of chocolate amid a cocoa bean shortage.
Fraser McKevitt, Kantar’s head of retail, said: “Higher prices have played a role in reaching that record spend figure, but the number of chocolate eggs sold in the seven days to Easter was also 3pc higher this spring than last.”
Discounts and deals helped temper food price inflation, which fell to 3.2pc over the four weeks to April 14. That marked a 30-month low.
Consumers spent a total of £1.3bn on promotional deals, with offers making up 29.3pc of sales. It was the highest proportion outside of Christmas since June 2021.
Elsewhere, online grocer Ocado reported a 12.5pc increase in consumer spending over the period, according to Kantar. The boost comes as Ocado faces calls to consider shifting its London listing to New York, The Telegraph reported.
An Asda spokesman said: “Earlier this week, we announced our FY23 financial results, reporting increased underlying profit to more than £1bn and like-for-like sales by over 5pc last year, while significantly growing free cashflow and reducing leverage. We are committed to doing the right thing for customers, colleagues and local communities – and are putting in place the strategic building blocks to set up Asda for long-term success.”
