Asda adds to pressure on Tesco

16 Aug 2012 | News - Comment now

Email a Friend

Asda adds to pressure on Tesco

The Walmart-owned supermarket Asda has gained market share against its UK rivals, the US retailer revealed in its second-quarter results.
 
As well as closing the gap on its competitors, the chief executive of Walmart International was keen to reel off Asda’s other achievements between May and July.
 
Doug McMillon stated that ‘Asda’s been named Britain’s lowest-priced supermarket for the 15th year running and Britain’s favourite supermarket for the second year in a row’. Both accolades came from The Grocer magazine.
 
Sales at Asda slowed in the second quarter, though. From growth of 2.2 per cent in the first quarter, it managed only 0.7 per cent for the most recent three months.
 
McMillon blamed the deceleration on ‘a difficult consumer environment and the wettest weather on record’.
 
Asda’s results follow research from Kantar Worldpanel showing that Asda expanded its market share by 6.2 per cent in the 12 weeks ending 5 August. Sainsbury’s saw the second-fastest growth, with 4.6 per cent.
 
Tesco is still Britain’s leading supermarket, with a market share of 30.9 per cent, but Asda’s latest market share of 17.4 per cent is closing that gap.
 
Having issued a profit warning in January, its first in 20 years, Tesco has replaced its UK boss and announced a recovery plan involving a £1 billion investment in its domestic operations.

In June the retail giant saw UK like-for-like sales, excluding petrol, dip 1.1 per cent. This led Phil Dorrell, director at retail consultants Retail Remedy, to warn that ‘Tesco is treading water but the paucity of its long-term marketing strategy could still drag it under’.
 

Related topics: Asda, Sainsbury's, Tesco, UK retail, Walmart

Post a comment