Asda sales dropped more than any of its “big four” supermarket rivals over the past three months. Sales fell almost twice as fast as its arch rival Tesco, according to new industry data released on Tuesday.
Sales at the British subsidiary of Wal Mart dropped 3.0 percent in the 12 weeks to October 11. Its market share fell 0.7 percentage points year-on-year to 16.6 percent.
Meanwhile, German discount chains Aldi and Lidl have both seen growth of over 17 percent – as British consumers opt for cheaper prices.
Fraser McKevitt, Kantar Worldpanel’s head of retail and consumer insight, said: “The discounters are opening more stores and their marketing is appealing to shoppers.”
However, discounters don’t have a range of products that can match the big four. McKevitt pointed out that not many people do all their shopping at discounters.
Mr McKevitt commented on Asda’s performance: “The indication is that they are letting sales slide for profits. Asda’s challenge is they don’t have a convenience estate.
“With convenience, you have to get it right. Morrisons got it wrong. Asda is quite canny. They are saying: ‘We will invest in what we know’.”
Grocery prices are 1.7 percent lower than last year and the supermarket price war shows no signs of abating. McKevitt said that the drop in prices “equates to £1.5 billion taken out of the market in the last year, saving each household £58 on average,”
The UK grocery market expanded 0.8 percent overall in the period.
McKevitt commented on the surge in popularity of discounters Lidl and Aldi: “For the second successive month Lidl has reached a new share high, now claiming 4.3 per cent of the market and growth accelerating to 17.9 per cent.
“Growth was particularly strong in Scotland, the scene of its ‘smarter shopping’ card trial. It’s a similar story for Aldi, where revenues are up 17.6 per cent on a year ago.”