Asda's sales have continued to decline, according to recent figures, underscoring the supermarket chain's struggles amid high indebtedness and intense competition.
The latest Kantar figures for the 12 weeks ending June 9 reveal a 4 percent drop in sales at Asda, following a 0.2 percent decline in the previous period. This downturn marks Asda as the poorest performer among supermarkets during this timeframe, widening the gap with competitors like Tesco and Sainsbury’s.
William Woods, a retail analyst at Bernstein, described Asda as the "most challenged" supermarket, noting "the worst year-on-year decline and an 86 basis points loss in market share." Asda's share of the grocery market now stands at 12.8 percent, down from 13.7 percent a year earlier and 14.8 percent in early 2021. In contrast, Tesco holds 27.7 percent of the market, and Sainsbury’s holds 15.2 percent, with both reporting sales increases of 4.6 percent and 4.9 percent, respectively, in the latest 12-week period.
The ongoing poor performance adds to Asda's financial pressure, exacerbated by heavy debt following its acquisition for £6.8 billion in 2021 by the Issa brothers and TDR, a private equity firm. This acquisition burdened Asda with significant loans just before interest rates surged, further hindering its ability to compete in a challenging economic environment.
Recently, Zuber Issa finalised a split from his brother Mohsin by selling his stake in Asda to TDR, which now holds a majority ownership stake of 67.5 percent in the chain, while Mohsin and Walmart retain 22.5 percent and 10 percent, respectively.
