Shoppers are spending £2million a day less at Asda than a year ago as it suffers a ‘profound identity crisis’.
The UK’s third-largest supermarket took £4.32billion in sales over the 12 weeks to January 25, compared with £4.49billion over the same period the year before, according to figures from market research firm Worldpanel.
The 3.7 per cent fall in sales was worth £2million a day. Five years ago, Asda took £4.8billion in sales over the same period – nearly £6million a day more than it does now.
Asda lost out to traditional rivals as well as discounters Aldi and Lidl. The retailer is more than a year into what chairman Allan Leighton reckons will be a three-to-five-year revival mission.
Asda’s market share has shrunk since its takeover five years ago by private equity firm TDR and the billionaire Issa brothers.
Before Christmas, Leighton insisted he would ‘rebuild’ the chain’s customer base after losing sales due to a botched IT transformation last summer.
Crisis: Asda took £4.32bn in sales over the 12 weeks to January 25 compared to £4.49bn over the same period the year before, according to figures from Worldpanel
The roll-out of its ‘Project Future’ upgrade caused issues that led to inconsistent stock levels and a poor customer experience online, the grocer said.
The latest figures highlight Asda’s struggles over Christmas and into the New Year. It comes despite Leighton pledging to be ‘ultra aggressive on pricing’ to entice customers away from other supermarkets.
Asda’s market share has fallen from 12.3 per cent to 11.5 per cent in the past year, according to the report. This is only slightly higher than the low of 11.4 per cent in the three months to December 28.
While Asda sales fell once again, Lidl posted a 10.1 per cent rise in the 12 weeks to January 25.
Ocado saw the biggest jump in sales, which rose 14.1 per cent thanks to its range of products with co-owner Marks & Spencer.
Britain’s largest supermarkets, Tesco and Sainsbury’s, grew sales by 4.4 per cent and 5.3 per cent respectively.
Jonathan De Mello, a retail analyst at JDM Retail, said Asda was ‘in the midst of a profound identity crisis’.
He said: ‘For decades, Asda successfully styled itself as the working family’s best friend.
Today, the brand is trapped in a self-inflicted mess of empty shelves and botched IT systems, while rivals like Tesco and Sainsbury’s have used savvy loyalty schemes to pull miles ahead.’
DIY INVESTING PLATFORMS
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.