What's happened
Asda's grocery sales fell 6.4% in the three months to August 10, marking a significant decline in market share to 11.8%. This drop has raised concerns about the supermarket's future, prompting calls for urgent action from its owners amid a chaotic leadership transition.
Why it matters
What the papers say
According to Sarah Butler in The Guardian, Asda's sales fell 6.4% in the latest quarter, marking a significant loss of over £2 billion in revenue. The GMB union has called for urgent action, stating that Asda is 'in a fight for survival.' Nils Pratley also notes that the debt burden from private equity ownership has hampered growth, with Asda's market share now at its lowest in over a decade. Meanwhile, Ian King from Sky News highlights the competitive edge of Tesco and Sainsbury's, which have successfully captured market share from Asda. The Independent's Henry Saker-Clark reports that Asda is investing £30 million to improve store standards, but the effectiveness of these measures remains to be seen.
How we got here
Asda, the UK's third-largest supermarket, has struggled since its acquisition by TDR Capital and the Issa brothers in 2020. The chain's market share has steadily declined, exacerbated by competition from rivals like Tesco and Sainsbury's, and internal management issues.
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More on these topics
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Asda Stores Ltd. trading as Asda, is a British supermarket retailer, headquartered in Leeds, West Yorkshire. The company was founded in 1949 when the supermarket owning Asquith family merged with the Associated Dairies company of Yorkshire.
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Mohsin Issa CBE and Zuber Issa CBE are British-Indian billionaire brothers and businessmen who founded Euro Garages in 2001, a Blackburn-based operator of filling stations, convenience stores and food service providers across Europe, the United States and
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Stuart Alan Ransom Rose, Baron Rose of Monewden is a British businessman and life peer, who was the executive chairman of Marks & Spencer until 2010, remaining as chairman until early 2011.
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Wm Morrison Supermarkets plc, trading as Morrisons, is the fourth largest chain of supermarkets in the United Kingdom, and is headquartered in Bradford, West Yorkshire, England.