Asda feels the pinch as its grocery market slips further

The challenge facing Andy Clarke, the new chief executive of Asda, was laid bare yesterday as industry data showed its market share had fallen for the fifth consecutive month.

A study by Kantar Worldpanel said the grocer's sales again trailed growth in the market and at its big three rivals, Tesco, Morrisons and Sainsbury's. The data pointed to Sainsbury's rapidly closing the gap on Asda, the country's second biggest supermarket. It also added to speculation that Asda, where Mr Clarke took the helm earlier this month, could be preparing for a fierce fightback on prices.

For the 12 weeks to 16 May, Asda's share of the grocery market fell by 0.1 per cent to 16.8 per cent, while that of Sainsbury's grew 0.2 per cent to 16.3 per cent and Morrisons rose by 0.3 per cent to 11.8 per cent.

While Tesco's sales grew ahead of Asda's over the 12 weeks, its market share flatlined at 30.6 per cent.

Edward Garner, of Kantar Worldpanel, said: "As Andy Clarke takes the helm, there has been much speculation about what the new chief executive will do to turn around Asda's fortunes. We expect him to focus on restoring the clarity of [its] Every Day Low Prices [promotion], as well as reviewing the implementation of range rationalisation."

He said Asda had already named these areas as a "key priority", and it had demonstrated this by guaranteeing to refund customers the difference in price if they find cheaper comparable products at its big three rivals.

According to Kantar, Asda's focus on value may be working against it because people are continuing to shop at the "premium end of the market" as the recession fades.

Compared with total growth in the grocery market of 3.3 per cent over the 12 weeks, Asda's sales advanced by just 2.5 per cent, while those at Morrisons were up 6 per cent, Sainsbury's up 4.4 per cent and Tesco's up 3.4 per cent.

However, the big four supermarkets were all trounced again by Waitrose, whose sales rose by 12.5 per cent over the period.