Asda's leader dismisses dwindling sales and reaffirms commitment to price competition battle
Asda's executive chairman, Allan Leighton, dismisses the supermarket chain's tumbling sales, claiming that he prioritizes a price war over market share. On the heels of slashing thousands of product prices and improving stock levels, Leighton touts the emergence of 'green shoots' in the company's performance.
In the three months ending March 31, Asda's sales plummeted by 5.9%, reaching £5 billion. Tuesday's announcement followed closely on the heels of industry data showing a decline in Asda's market share, sitting at 12.1%, the lowest since 2011.
Despite these figures, Leighton, 72, remains unfazed. He asserts, "Market share today means nothing to me. We are in a turnaround situation, restoring a business to an enduring proposition." Leighton emphasizes that Asda is not concerned with short-term gains but is focused on long-term growth and building a sustainable future.
Several strategic initiatives aim to revive Asda's faltering fortunes. The company aims to position itself as a low-price leader, offering 7-10% cheaper products than rival supermarkets in the next year. To achieve this, Asda has relaunched the 'Rollback to Asda Price' program and plans to further decrease prices across its range.
Over the past few months, Asda has seen a notable improvement in product availability, increasing from 90% to 95%. The company has also invested £80 million in employee pay and benefits to boost morale and productivity, with a view to enhancing customer service.
Asda's sub-brands, such as George and Asda Express, have shown positive growth, with George achieving a 3.5% like-for-like sales growth and Asda Express demonstrating a 6% growth. These figures suggest the potential for growth within specific market segments, bolstering Asda's efforts to appeal to price-conscious consumers and increase market share.
This new strategy comes four years after Asda's takeover by private equity firm TDR and the billionaire Issa brothers. Asda's success in implementing these initiatives will be closely watched as the company strives to regain its competitive edge in the UK's saturated supermarket market.
- Leighton, in his efforts to turn around Asda's business, has also invested in employee pay and benefits, seeking to boost morale and productivity, with the goal of enhancing customer service and potentially attracting more customers.
- The company's strategic plan involves positioning itself as a low-price leader, offering competitive prices on its products compared to rival supermarkets, and plans to achieve this by relaunching the 'Rollback to Asda Price' program and further decreasing prices across its range.
- As Leighton and Asda focus on long-term growth rather than short-term gains, they also seek opportunities to expand within specific market segments, as evidenced by the positive growth of sub-brands like George and Asda Express, suggesting potential for further growth and increased market share in the future.
