Advertisement
UK markets open in 7 hours 18 minutes
  • NIKKEI 225

    40,126.35
    -971.35 (-2.36%)
     
  • HANG SENG

    17,778.41
    +39.01 (+0.22%)
     
  • CRUDE OIL

    82.33
    -0.49 (-0.59%)
     
  • GOLD FUTURES

    2,447.10
    -9.30 (-0.38%)
     
  • DOW

    40,665.02
    -533.08 (-1.29%)
     
  • Bitcoin GBP

    49,449.74
    -181.24 (-0.37%)
     
  • CMC Crypto 200

    1,330.13
    +0.63 (+0.05%)
     
  • NASDAQ Composite

    17,871.22
    -125.68 (-0.70%)
     
  • UK FTSE All Share

    4,501.39
    +12.15 (+0.27%)
     

Mohsin Issa dealt fresh blow as Asda sales slump

Mohsin Issa
Mohsin Issa has been running Asda in recent years - Jon Super

Mohsin Issa’s turnaround efforts at Asda have been dealt a fresh blow after it became the only major supermarket to post a drop in sales.

Sales figures at Asda were down 4pc in the 12 weeks to June 9, according to new figures from industry analysis firm Kantar, with the supermarket’s market share falling to 12.8pc from 13.7pc last year.

This only increased the gap between Asda and its two largest rivals, Tesco and Sainsbury’s, which both managed to grow sales in the last quarter.

Tesco’s market share rose from 27.1pc to 27.7pc over the period, while Sainsbury’s portion jumped to 15.2pc from 14.9pc.

ADVERTISEMENT

It came as Kantar said cost pressures were easing for shoppers, with grocery inflation falling for the 16th consecutive month to reach 2.1pc.

The figures will raise hopes that the headline rate of inflation, which will be announced on Wednesday, is approaching the Bank of England’s 2pc target, down from its current level of 2.3pc.

The figures will, however, serve as a setback to Asda bosses, who have been struggling to attract shoppers amid a broader cost-cutting push.

The Telegraph last weekend revealed that Asda is outsourcing more than a hundred jobs to an Indian-based supplier, raising fresh concerns over job cuts as the supermarket battles to strip out extra costs.

Asda has been losing market share ever since it was bought by the brothers Mohsin and Zuber Issa and TDR Capital for £6.8bn three years ago.

Mohsin Issa has been running the supermarket in recent years, although the retailer is currently trying to identify a new chief executive.

His brother, Zuber, recently announced that he was selling his 22.5pc stake in Asda to TDR, allowing the private equity firm to take majority control of the business.

While Asda struggled, other supermarkets displayed signs of improvement in the latest 12-week period.

Middle-class supermarket of choice

The Kantar figures showed that Waitrose was attracting more new shoppers than any of its rivals amid a battle with Marks & Spencer to become Britain’s middle-class supermarket of choice.

The supermarket lured 188,000 new shoppers over the past 12 weeks, industry figures from Kantar show, the sharpest increase posted by any of the grocers during the period.

It followed a major push by Waitrose to regain shoppers after years of falling behind rivals.

The supermarket, which is owned by John Lewis Partnership, has faced particular pressure from M&S, which has been convincing more customers to do their full shop in its stores.

Stuart Machin, the M&S chief executive, told The Telegraph this month that the retailer had been gaining on Waitrose. He said: “You could argue we should have overtaken them already. I might even be arguing that internally here.”

However, Waitrose has been plotting a fight-back, investing in areas such as improving customer service to get people back into its stores.

In April, Waitrose said it was cutting prices for the fifth time since early 2023. It has also embarked on an overhaul of its stores, announcing earlier this year that it would be revamping 80 Waitrose shops within the next three years.

The moves came as part of a wider overhaul at the John Lewis Partnership, with bosses in March pledging to turn their attention back to its retail operations after years of looking to diversify the business into housing and financial services.

Dame Sharon White
Dame Sharon White, the chairman of John Lewis Partnership, is set to be replaced in the role by Jason Tarry, the former UK boss of Tesco - Jason Alden

Dame Sharon White, the chairman of John Lewis Partnership, said the company would “unashamedly focus” on stores. She is to be replaced in the role by Jason Tarry, the former UK boss of Tesco, in September.

According to Kantar, Waitrose sales were up 3.5pc in the latest 12-week period, meaning the supermarket has a 4.5pc share of the grocery market.

It came amid a tougher time for supermarkets more broadly, as wetter weather held back grocery sales. Kantar said sales were up just 1pc over the four weeks to June 9 across grocers, with the average shopper visiting a supermarket 16.3 times this month, compared to 16.4 the same month last year.

Kantar’s Fraser McKevitt said: “The sixth wettest spring on record hasn’t just dampened our spirits leading into summer, it’s made a mark on the grocery sector, too, as it seems Britons are being put off from popping to the shops.”

Cost of living pressures have also continued to weigh, with around 22pc of households saying they were struggling to make ends meet. However, Kantar said costs were falling in almost one third of the grocery categories it tracked, with the biggest drops in areas such as butter, milk and lavatory paper.

Mr McKevitt said: “There are positive signs that many of us no longer feel the need to restrict our spending quite so much, with lower inflation helping to ease the pressure on people’s pockets.”

An Asda spokesman said: “We are building a bigger and better Asda and remain focused on our long-term strategy of investing to grow the business. This is anchored in providing customers with great quality products, uncompromising value and the opportunity to shop with us in more formats in more communities.”