Following today’s release of ASDA’s figures for second quarter ending 30 June 2024; Sofie Willmott, Associate Retail Director at GlobalData, a leading data and analytics company, offers her view: “Now that UK food inflation has eased, ASDA’s woes have been exposed and it is clearly on a downward trajectory, with like-for-like sales excluding fuel in Q2 (-5.3%) pulling down its H1 performance to -2.1%. With food growth barely mentioned in its results, we can assume the division produced numbers the grocer would prefer to hide.
“Despite being up against strong comparatives last year when high food inflation was boosting performance, many grocers have delivered positive l-f-l sales in 2024. Tesco achieved 4.6% l-f-l sales growth in the 13 weeks to 25th May and Sainsburys reported +3.0% l-f-l growth in the 16 weeks to 22nd June. Both players drove sales through food where they have prioritised honing their product offers by price matching on essentials and improving their premium ranges. ASDA has lagged behind and its market share has been eaten away by both midmarket competitors Tesco and Sainsburys at one end, and value players Aldi and Lidl at the other.
“ASDA is focused on major technology improvements across the board covering customer-facing areas like self-checkouts and scan and go devices, as well as back-end processes within its distribution centres and in its payroll software. No doubt this will bring benefits and cost savings in the long term but while it has taken its eye off its core product offer, distracted by these projects as well as buying EG group and a number of Co-op stores, its competitors have been laser-focused on food at a time when consumers have been extremely budget-conscious and willing to switch.
“This is reflected in its online results which despite standing out amongst ASDA’s poor H1, are also behind its competitors with Ocado reporting 11.3% growth in its H1 to 2nd June and Tesco 8.9% online growth in its Q1 ending 25th May. ASDA must focus on ensuring its core food offer is compelling and fight to win back shoppers as a priority over complementary areas that although important in the long run, are less of a driver than value for money.”
