Wal-Mart will be taking interest in Asda's decline


James Moore
Wednesday 29 July 2015 01:44

Asda sometimes gets forgotten in the always entertaining saga of Britain’s battling supermarkets. Being owned by America’s Wal-Mart means it doesn’t issue a trading statement every few weeks and is therefore less visible. Handy when you’re struggling.

And Asda is struggling. The latest figures on market share from researcher Kantar Worldpanel show that Sainsbury’s has passed its rival to take the title of Britain’s second biggest supermarket by market share. It briefly did it over Christmas, but this is the first time in 12 years that it has pulled off the feat outside the traditional seasonal bonanza.

That fact won’t necessarily be a cause for celebration, given that it was achieved by dint of Sainsbury’s sales declining by less than its rival in the face of the continued strength of discounters Aldi and Lidl. Not to mention a resurgent Co-op.

But it is significant. Asda’s USP has always been more price-driven than its rivals, and that’s a problem when they start to match its prices.

Sainsbury’s price-match offer is highly conditional. You have to buy more than 10 products, the coupons max out at a tenner, and so on. But could it be having an impact? Every one of the big four’s sales took a tumble, but Asda’s 2.7 per cent slump caught the eye, given that the next worst, Tesco, declined by only 0.6 per cent.

There’s probably more to this story than Sainsbury’s gimmick, and Asda will no doubt deride Kantar’s figures, as all the supermarkets do, especially when they make them look bad.

However, if they’re even close to the true picture, we can expect to see change coming, and soon. Asda’s parent isn’t known for being terribly tolerant of under-performance among members of “the Wal-Mart family”.

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