Key Rivals Matching Asda In Price War

While Asda has stated its aim to establish a 5%-10% price gap over its full-range rivals, new data suggests Tesco and Sainsbury’s are making it difficult for the struggling retailer to make progress with its strategy to win back shoppers.

The latest price comparison survey by trade magazine The Grocer, which looks at a basket of 33 everyday items, saw Tesco beat Asda by 54p in last week’s analysis.

Amid recent signs that food inflation is starting to ease, the cost of the selection of goods at Tesco and Sainsbury’s was 11% less month-on-month, while Asda’s was down 0.3% month-on-month

The Grocer noted that Tesco’s win was powered by several deep discounts, with its £81.04 basket featuring 11 price cuts.

Asda’s £81.58 basket offered the lowest price on 13 lines, with its EDLP strategy evident in several areas where it was cheapest without promotions.

Tesco’s selection was 1.4% less than Sainsbury’s (£82.18) and 6.1% cheaper than Morrisons (£86.31), where prices rose by 4.6% month-on-month, the highest of all retailers.

Last month, Asda trumpeted that it was cutting the cost of over 1,000 products as part of its drive to improve its price competitiveness. The retailer noted that the price cuts were intended to help ease the financial pressures currently being faced by many households as they head into the most expensive time of year.

The reductions were in addition to nearly 3,500 Rollback deals currently available in its stores.

Back in March, Asda signalled that it was willing to take a material hit to its profits in a bid to win back shoppers. However, price cuts since then have failed to halt its slide in market share, with Tesco and Sainsbury’s maintaining their momentum and the discounter’s making further gains.

Last month, Asda told suppliers at its annual conference in Leeds that it was launching a reset of its product offer “bay by bay” as it looks to accelerate its turnaround plan, which its Chairman, Allan Leighton, said was “30% complete”.

NamNews Implications:

• The key to price war success is perhaps not so much how shelf prices compare…
• …but how deep a retail rival can afford to go...
• ...and for how long...
• i.e. Tesco & Sainsburys, Aldi & Lidl may be in a better financial position than Asda & Morrisons…

Asda To Open Nine New Express Stores This Week

Asda is ramping up the rollout of new Express convenience stores this week by opening nine sites.

The group recently announced that it was resuming its Express store opening programme after a pause to focus on converting the 469 sites it acquired from the Co-op and EG Group. Up to 20 of the convenience stores are due to open in the final three months of 2025.

Asda noted that the new stores reflect its ambition to strengthen its presence in high-footfall urban areas, residential neighbourhoods, and transport hubs – locations where it has traditionally had a limited presence.

Seven of the openings this week are in London, including Tower Bridge, Greenwich, Limehouse Station, Harringay, Deptford, Whetstone, and the former Arsenal FC club shop at Finsbury Park station. Outside the capital, two new stores will launch this week in Botley (Southampton) and Stoke.

Each Express convenience store offers over 3,000 branded and own-label products, with a range of fresh, ambient and chilled groceries, alongside beers, wines and spirits. Additional services include Costa Coffee machines, ATMs, Amazon collections and returns, and on-demand delivery options through the likes of Uber Eats, Just Eat and Deliveroo.

All new stores will also be equipped with electronic shelf labels (ESLs) as part of a wider rollout announced by the retailer earlier this month.

“We’re thrilled to be opening nine new Express stores this week, including seven in London – an area where we have traditionally had less of a presence in convenience,” said Joseph Sutton, VP of Asda Express, foodservice and fuel.

“These openings are a key part of our strategy to bring Asda’s unbeatable value to more urban areas and residential communities across the UK. We know customers have looked forward to these stores opening for a long time, and we’re delighted to welcome them in and offer outstanding value across their favourite products.”

Earlier this month, Asda opened a new Express store in Castleford, kicking off the latest phase of its rollout programme. The group is targeting to open a further 10 Express stores before the end of the year, with a “strong” pipeline of further openings planned for 2026.

NamNews Implications:

• Asda continue to race against the clock.
• Key issue is the extent to which suppliers will attempt to keep pace…

Asda Outlines Plans For Range Reset

Asda told suppliers at its annual conference in Leeds this week that it was launching a reset of its product offer “bay by bay” as it looks to accelerate its turnaround plan, which its Chairman, Allan Leighton, said was “30% complete”.

According to trade publication The Grocer, the struggling supermarket’s recently returned Chief Commercial Officer, Darren Blackhurst, announced an overhaul of its commercial strategy at the event, with suppliers being told the reset would be based around SKU duplication removal, rather than a range cull, with a focus on core lines, more space and better buying.

In addition to a drive for greater simplicity, Blackhurst is reported to have said that Asda’s buyers would seek to reset the relationship with suppliers by focusing less on its troubles and spending more time building partnerships.

Meanwhile, Leighton reiterated Asda’s drive to become up to 10% cheaper than its traditional supermarket rivals, arguing that growth in the discount channel was limited for brands, given that Aldi and Lidl were continuing to prioritise own label.

Speaking to The Grocer after the event, Blackhurst said: “As we shared at the event, a strong Asda benefits everyone, and there is a big opportunity to build the right customer proposition together and unlock profitable growth.

“We’re focused on simplifying how we work by reducing duplication, making better use of space to sell more volume and improving choice by strengthening our own-brand and premium ranges. As we start to buy better and build better relationships with key suppliers, we can maximise efficiencies, reinvest in price, drive volume, and ultimately grow market share.

“We want to work with our suppliers constructively and in a collaborative way to improve the offer for the 20m customers who shop with us every week. Our buying teams are looking forward to getting out to meet our suppliers in the coming weeks to build on their plans.”

NamNews Implications:

• SKU duplication removal, rather than a range cull…
• …a focus on core lines, more space and better buying…
• …more time building partnerships…
• …to build the right customer proposition together.
• And all against the clock.
• Over to you…

Asda Reportedly Planning Another Range Overhaul

Asda has invited key suppliers to a ‘reset’ conference on 7th October, which is thought to be a precursor to a significant range overhaul as part of the struggling supermarket’s turnaround plans.

A report by The Grocer noted that Chairman Allan Leighton has already cut the number of brands in the Asda range and is now seeking to attract brands to become partners in the next phase of its range shake-up.

The meeting is expected to see the group’s returning Chief Commercial Officer, Darren Blackhurst, outline plans for a “commercial reset” of the business, sparking speculation that he is planning another review, similar to the one he carried out when he last held the role from 2006 to 2010.

The Grocer revealed that the invitation sent out to UK sales directors last week invites them to attend Asda’s Merchandising Centre of Excellence in Leeds, stating plans to “put customers at the heart of everything we do”.

A supplier source is quoted in the report as saying: “The speculation is that Blackhurst will be looking for suppliers to get on the bus. We think he will be looking to do exactly as he has done in the past with the infamous John West vs Princes Tuna, where one got delisted and the other got the whole pie.

“And the rumour is that it’s not just about 2026. There will be an ask for Q4 2025. This is where experience comes in handy: we have been on this merry-go-round a few times.”

The Grocer noted that despite Asda stressing it regularly holds supplier conferences at the venue, the fact that sales directors have been given only three weeks’ notice of the event has increased speculation about its intentions.

“They do have fairly regular conferences, but not at this short notice and not aimed specifically at sales directors,” said another supplier.

Meanwhile, Ged Futter, a former Asda buyer and founder of The Retail Mind, who previously worked under Blackhurst, commented: “We have seen Blackhurst do this before at Asda with the less is more strategy. Now he’s got his feet back under the table, this is clearly Asda making a call to arms for suppliers for the next financial year, and suppliers will be expecting more of the same.

“The trouble for Asda is that the retail world is in a very different place to what it was in 2006. Just look at the share Aldi and Lidl had then. Back then, Asda owned price.

“Leighton has already tried to a certain extent to do this already this year. It makes sense for them, now they’ve hired people like Blackhurst and Eyre to be putting them out in front of suppliers. But I fear that Asda will be out to achieve the impossible.”

NamNews Implications:

• You have to admit, Asda keep trying…
• Given Asda’s race against the clock, most things have to be at short notice…
• This is really about brands’ willingness to compete i.e. a probable ‘one in, one out’ policy…
• …with a brand coming on board, wondering how a rival brand will retaliate elsewhere.

Asda’s New Supplier Portal Plagued By Problems

Following reports this week that Asda is close to completing its £1bn Project Future IT separation from Walmart, it has now been revealed that food and drink manufacturers are complaining about problems with the supermarket’s new supplier portal.

According to trade publication The Grocer, Asda is in the process of speaking to groups of suppliers to try to tackle issues with the new system, with one supplier describing the situation as “an utter mess”.

The report stated that major problems have been reported with Asda’s transition to its new ADR system, which is used by suppliers for forecasting, sales data, and stock control issues. This system has been introduced to replace Walmart’s Retail Link system.

Former Asda buyer Mervyn Jones, who runs a consultancy supporting companies on how to use new systems, said that the transition from a system buyers knew “inside out” to Asda’s new system was beset with problems.

“ADR is so bad I don’t know where to start with it,” Jones posted on LinkedIn. “I have a number of contacts within Asda. Some of them are telling me not to use Retail Link anymore and to move completely across to ADR. ADR, however, says to use Retail Link for historical data.

“Other contacts in Asda say to continue using Retail Link for forecasting and that ADR’s data is incomplete. It’s a mess. A complete and utter mess, and the training Asda is offering online is not up to scratch.”

Another source quoted by The Grocer said: “Moving to a new system at the same time as Asda is going through other major changes as a business was always a recipe for complexity.

Suppliers rely on these systems for key information on stock movements, waste and stock control, and historically, Asda’s system has been top of the tree.

“That’s not the case anymore, and suppliers are not getting the same speed of information. Data on products they use to get at the start of the day is now coming much later.

“To Asda’s credit, they are being transparent about these problems and talking to suppliers to try to tackle these issues, but at the moment, it is causing a lot of issues.”

The report noted that Asda was engaging with suppliers as they transitioned from Retail Link to the new supplier portal.

A company source told The Grocer that Asda had expected a “period of adjustment” and was actively working with suppliers to ensure they were supported throughout this period, including offering training and guidance materials.

NamNews Implications:

• Already in a race against the clock.
• Asda could have done without ‘teething troubles’ associated with a £1bn IT conversion project..
• At a time when willing suppliers are trying hard to lend support to a key retail player…
• Whose rival retailers present increasingly appealing trade investment opportunities..
• These unprecedented times tick on remorselessly…
• ...fast leaving Asda with the option of going for broke, regardless.

Asda Launching New Customer Insight Platform That Supports Evolution Of E-Commerce Category Management

Asda is preparing to launch a new customer insight and collaboration platform, created in partnership with eStoreBrands, an e-commerce data analytics specialist.

According to trade publication Retail Week, Asda Xpert will launch next week with the aim of helping the supermarket group and its suppliers “understand and more effectively meet the needs of its online shoppers”.

A source is quoted as saying that the new platform will provide brands with “advanced data-driven insights, enabling them to optimise product performance, track market trends, and make smarter category decisions for Asda.com”.

The new platform will also “integrate digital shelf analytics and real-time performance data” in order to help “suppliers drive mutual category growth and improve decision-making”.

It is claimed that Asda Xpert will be a major step forward in the “evolution of e-commerce category management” and will provide brands with the tools they need to “maximise growth, optimise strategies, and better serve customers in an increasingly competitive online retail space”.

Barney Burgess, Asda’s VP of Online, told Retail Week: “We’re really excited about this new partnership between Asda and eStoreBrands. Leveraging an e-category management approach, Asda Xpert will enable brands to identify new insights from our data, driving more informed actions which will accelerate growth for the brands as well as Asda.com”.

eStoreBrands’ VP of product strategy, Francis Nicholas, added: “Having spent years working for brands like P&G and Nomad Foods, I know first-hand how valuable this kind of insight is.

When working with retailer buying, category, and ecommerce teams, this was the type of solution which was missing. Partnering with Asda on Asda Xpert is incredibly exciting, and we look forward to supporting brands in making data-led decisions that benefit both suppliers and Asda.”

NamNews Implications:

• Asda are patently pressing all the right buttons.
• And innovating with leading-edge tools.
• The key issue remains that of sufficient EBITDA improvement…
• …fast enough to beat the clock.
• Fingers crossed.

Asda Closing In On Major Property Deal That Will Boost Recovery Funds

Asda is reported to be in advanced talks about a £400m deal to offload some of its real estate assets to an investment house to help fund its turnaround plans.

According to Sky News, Blue Owl Capital, a New York-listed asset management group, has emerged as the frontrunner to buy roughly 20 Asda supermarkets and lease them back to the struggling retailer. Sources indicated that a deal could be formally agreed upon within weeks.

Asda has undertaken sale & leaseback deals in the past, notably in 2023 when it struck a £650m deal with US-based Realty Inc.

A spokesperson for the retailer declined to comment on the talks with Blue Owl Capital but said: “Sale & leaseback [transactions] have been a feature of the retail industry for many years.

“While maintaining a strong freehold base remains central to Asda’s property strategy, we will consider suitable opportunities to unlock value from our property portfolio as part of our material programme of investment into the business.”

While sales at Asda are still in decline, recent industry data suggests that there are signs of recovery after significant investment in cutting prices and improving its offering.

NamNews Implications:

• Sale & leaseback represents a capital gain for a struggling business.
• But it can add an additional rent burden…
• Asda need the money but is obviously intent on keeping sale & leaseback to a minimum.
• (keeping in mind an exit strategy that will optimise the ‘eventual’ sale/refloat of the business)
• Meanwhile, fingers crossed…

Asda Planning Major Upgrade To Stores In Yorkshire

Asda has marked Yorkshire Day (1st August) by unveiling a major store investment programme in its home county as part of its drive to improve the in-store experience for its customers.

The struggling supermarket is investing £7.2m to upgrade stores in Kingswood, Harrogate, York, Pudsey, and Keighley by the end of 2025.

Each store included in the programme will benefit from full shop floor refurbishments, including a “simpler and more intuitive” layout, as well as new lighting and signage – all designed to modernise the shopping space.

An additional £4.6m will be invested in two stores in the surrounding area – Grimsby and Stockton – with the retailer aiming to extend the programme to more UK locations next year.

Work will begin in most stores in September and is expected to take around seven weeks per store.

“We’re proud to continue investing in the communities we serve – especially in Yorkshire, where our story began 60 years ago,” said Liz Evans, Chief Commercial Officer – Retail and Non-Food.

“Following the successful refurbishment of our Pilsworth store earlier this year, we’re pleased to share our plans to modernise these Yorkshire stores and further enhance the shopping experience.”

While sales at Asda are still in decline, recent industry data suggests that there are signs of recovery after significant investment in cutting prices and improving its offering.

NamNews Implications:

• Logical for Asda to invest in its stronghold.
•  And if they can make it work there, they can make it work anywhere…’
• Hopefully....
• But the real issue is Asda’s fight against the clock…
• …as stakeholders await the EBITDA 'bottom line' impact.

Asda Cutting Some Store Manager Roles In Bid To Reduce Complexity

Asda is removing a layer of middle management across its store estate as part of Chairman Allan Leighton’s wider strategy to revive the struggling supermarket.

A report by The Telegraph said the internal shake-up will result in a number of in-store manager roles being made redundant to “take out complexity” from the business.

Asda is combining its ‘section manager’ and ‘trading manager’ roles into a single ‘manager’ post, who will report to operation managers.

The section managers are a layer of in-store middle management who supervise team leaders and teams of shelf stackers. Meanwhile, the trading managers are more senior and have responsibility for “driving sales and standards”.

Asda noted the shake-up will mean around 20% of store management will effectively be promoted to the new combined ‘manager’ post, while other managers will no longer be needed because of the duplication of roles.

Asda has not commented on how many people could be made redundant, but some are being asked to move to different nearby stores.

However, workers in larger supermarkets have already been placed on gardening leave, with sources claiming the number of people in management roles was being halved in some stores. The shake-up does not affect Asda Express stores.

A spokesperson for Asda said: “The investment in this new structure brings decision-making closer to the shop floor, and our customers, by clarifying roles and providing clearer accountabilities.

It also creates more opportunities for colleagues to develop their careers and progress into store management roles, with a significant number of immediate promotions confirmed today. We will be offering our full support to other colleagues impacted by the changes.”

It is the latest round of job cuts at Asda since Leighton rejoined as its Chairman in November, promising to improve the chain’s competitiveness and store standards.

Earlier last week, it was reported that Asda is asking major manufacturers to make big price cuts as part of its strategy to win back customers.

NamNews Implications:

• Not an easy decision…
• …especially in terms of morale of those not leaving.
• Asda presumably in a ‘cut to fit’ mode.
• i.e. With reduced demand, one approach can be to reduce resources...

Aldi Moves Ahead Of Asda

On the same day that Asda suggested that it was on the road to recovery, new figures show it has been overtaken by Aldi in market share terms across certain categories.

According to Kantar data published by trade magazine The Grocer, Aldi’s grocery market share was 9.8% over the four weeks to 18 May, compared with Asda’s 9.4%.

The figures include the food & drink, household, and healthy & beauty categories and are different from the widely covered numbers that the research group makes publicly available each month. They relate to all expenditure through store tills, with latest figures putting Asda ahead on 12.1% compared to Aldi’s 11.1%

The data seen by The Grocer is usually only shared by Kantar with the supermarkets. Over the longer 12 week period to 18 May, Aldi and Asda were neck-and-neck on 9.8%. Aldi’s grocery sales rose 8.2% year-on-year during the period, while Asda’s fell 6.7%.

Looking at just food and drink (excl. alcohol, household, toiletries and healthcare), Aldi is significantly ahead of Asda, with a share of 10.8% over the 12 weeks versus 10%.

Speaking to The Grocer, Giles Hurley, CEO of Aldi UK & Ireland, said: “In the latest data we have taken third spot. That’s not an objective for us. We don’t benchmark on placement in the market. But it’s an interesting output of our growth and it’s exciting. Seven in every 10 households shop with us.”

An Asda spokesperson commented: “The data upon which these claims are based is highly selective and does not capture Asda’s strong performance across George, Asda Express and Fuel, which remain a key point of difference to the limited-range discounters.”

NamNews Implications:

• By whatever cut, the impact is perceptible to both Aldi and Asda.
•  i.e. affects morale…
• …that eventually seeps into the aisle.
• Watch this space…

Asda Planning Sale & Leaseback Of Stores To Raise Cash

Asda is hoping to raise around £400m from the sale & leaseback of 20 of its supermarkets to fund its turnaround plan.

According to property-focused publication Green Street News, the struggling retailer has appointed real estate adviser Eastdil Secured to seek out buyers.

Sale & leaseback deals are popular among major supermarkets as a means of raising capital to shore up their balance sheets, with Sainsbury’s and Morrisons completing deals in the last few years.

An Asda spokesperson said: “Sale & leasebacks have been a feature of the retail industry for many years.

“While maintaining a strong freehold base remains central to Asda’s property strategy, we will consider suitable opportunities to unlock value from our property portfolio as part of our material programme of investment into the business.”

Allan Leighton, who returned to Asda at the end of last year as Chairman, has pledged to turn around the group’s fortunes by cutting prices, improving product availability, and refreshing tired stores. Analysts have estimated that the plans will cost close to £900m over the next three years.

Back in March, Leighton warned that the investment drive would “materially reduce our profitability this year” but said he had “a pretty significant war chest” to tackle several years of weak trading at the supermarket.

However, with debts of £3.8bn left over from the takeover by TDR Capital and the Issa brothers in 2021, it has been suggested that Asda has limited firepower for a prolonged price war with its rivals.

NamNews Implications:

• Can be a good source of cash…
• …to cover the cost of turnaround plans (£900m).
• So sale & leaseback process will continue until that point is reached, at least.
• But the business patently then has to cover the cost of rent that it previously owned..
• ...thereby diluting the bottom line...
• It ain’t over yet…

hashtag

Asda Names Creative And Media Agency Partners

 

Asda has appointed Lucky Generals and Spark Foundry as its creative and media agency partners following a pitch process.

Advertising firm Lucky Generals will be Asda’s new creative agency partner for both its supermarkets and its George fashion & home brand.

The struggling grocer noted that it had been impressed by the agency’s ideas to show how Asda can deliver on its key mission of “delivering uncompromised value for hard-working families”. Lucky Generals will begin transitioning into the role in May.

Meanwhile, Asda is retaining Spark Foundry as its media agency, continuing an eight-year partnership.
“We set off on this journey to ensure we have the right partners in place to support Asda’s objectives to offer uncompromising value to our customers and with a key focus on the ‘Asda DNA’ that really resonates with our customers,” said Adam Zavalis, VP of Marketing at Asda.

“We are really pleased to have identified Lucky Generals as our new creative partner whilst retaining Spark as our media partner and look forward to working together to bring Asda’s personality to life for our customers.”

Cressida Homes-Smith, the CEO at Lucky Generals, added: “This is a pivotal moment for two of Britain’s greatest consumer champion brands – brands that deserve to be right in the heart of the nation at a time when things in Britain are genuinely tough.

“We love the palpable sense of energy, enthusiasm and determination the Asda and George bring, and there has been a natural and positive relationship between us since the very first meeting. We’re genuinely grateful for the honour and opportunity and can’t wait to get our sleeves rolled up and put these brands back where they belong.”

NamNews Implications:

• Asda now needs to hit media hard & fast…
• …in what will hopefully be a ‘re-education’ of its public…
• …given that a ‘new-education’ message would probably take longer than Asda has available.
• Fingers crossed…

Tesco Expected To Post Strong Annual Results And Address Asda Price War Challenge

Tesco is set to reveal strong sales and profit figures when it releases its annual results on Thursday, with investors keen to hear how the UK’s leading grocer plans to respond to Asda’s drive to slash prices to become 5% to 10% cheaper than its rivals.

Last month, Asda’s Chairman Allan Leighton said that the business was prepared to take a significant hit to its profit to finance a shift to a new low ‘Asda Price’ by the end of 2026 in a bid to recover lost market share. The statement led to shares in Tesco, Sainsbury’s and M&S tumbling on fears of a major supermarket price war.

However, most analysts think that scenario is unlikely, noting the increasing cost pressures retailers and their suppliers face. Recent industry data from Kantar shows that grocery price inflation in the UK rose slightly to 3.5% last month, with shoppers turning to promotions to save money.

Market watchers have also questioned whether Asda has the financial firepower for a sustained price war, given that its majority owner, private equity group TDR Capital, is not putting additional equity into the business.

Meanwhile, Tesco and Sainsbury’s have stronger balance sheets than Asda.

Tesco’s results “will be an important staging post to test the mood music of the market leader on such matters, we sense a mature, resolute and professional approach will ensue,” said renowned Shore Capital analyst Clive Black.

Analysts at Bernstein looked at over 500 own-label products that Tesco price matches with Aldi and compared them with Asda. “Tesco and Aldi do not massively need to react. They are winning on price perception,” it found.

Tesco has guided for an annual retail adjusted operating profit of around £2.9bn, up from £2.76bn last year, supported by robust sales growth in its core business.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Growth in the UK and Europe helped to offset declines in its wholesale business, Booker. It’s a competitive space, but its improving proposition saw Tesco record its highest market share since 2016. Investors will be keen to see this trend continue when it reports full-year results.”

Analysts expect Tesco to flag further profit growth in next 12 months despite costs (higher national insurance contributions, national minimum wage, new packaging levy.

NamNews Implications:

• The added uncertainties of Trump tariffs…
• …gives retailers the ’excuse’ to wait and see outcomes.
• i.e. postpone any plunge into a UK price war, if intended.
• Besides, whilst Asda management may have permission to make threats…
• …this may not include the funding of a prolonged price war.
• Meanwhile, retailers with strong balance sheets may now want to preserve their ‘wealth’ following Trump’s announcements.
• This says a lot: “Tesco and Aldi do not massively need to react. They are winning on price perception”.

Cost Of Asda’s IT Upgrade Set To Exceed £1bn; Looking At Moving Some Jobs Abroad

The cost of Asda’s troubled IT upgrade is set to surpass £1bn this year, adding more pressure to the business as it embarks on a turnaround plan that includes substantial investment in reducing its prices.

According to The Sunday Times, the troubled supermarket recently told bondholders that it was spending a further £175m on Project Future, a programme to separate its technology systems from its previous majority owner, Walmart. It told lenders this project had already cost £900m since 2021.

Disentangling Asda’s IT infrastructure from the US retail giant has been plagued by delays. Walmart recently agreed to push back its February 2025 deadline for the project, which prevented Asda from being hit with a multimillion-pound penalty.

Asda has said that the costs of Project Future would be significantly lower this year as the programme is finally concluded.

The retailer recently announced another round of price cuts as part of a move to shift its entire offering to a new low ‘Asda Price’ by the end of 2026, with the aim to be 5% to 10% cheaper than its rivals

Asda’s Chairman, Allan Leighton, said earlier this month that he had “a pretty significant war chest” to tackle several years of weak trading at the supermarket. He also promised “a big investment” in the business even though it would “materially reduce our profitability this year”.

A separate report by The Telegraph over the weekend suggested that Asda is drawing up plans to shift some jobs abroad as part of moves to cut costs so it can invest in its price Rollback campaign and store improvements.

The retailer is said to have launched a consultation that could involve 26 jobs being cut across its customer service team and shifted overseas. Those affected are understood to be in Asda’s social media department, which is responsible for fielding questions from shoppers on sites such as X.

The newspaper noted that the proposal, which has not yet been finalised, echoes a similar move by Asda last year when it outsourced more than 100 IT staff to an Indian-based supplier.

An Asda spokesperson is quoted as saying: “As more customers choose to engage with us in different ways, we are proposing to make some changes to our online customer services team to support this changing dynamic.

“We have opened a consultation with a small number of colleagues affected should this proposal go ahead, and our priority is to do all we can to support them during this process.”

NamNews Implications:

• Asda management must sometimes refer to the old IBM maxim: ’It’s Better Manually’
• Seriously, £1bn added to their other issues must be a continuing distraction.
• Asda are taking all the obvious steps.
• And managing stakeholder expectations.
• With the best team possible.
• Fingers crossed…

Asda Chief Customer Officer Exiting After 18 Months

As Asda pushes forward with its turnaround strategy, David Hills is stepping down from his role as Chief Customer Officer.

He joined the business in September 2023 from Aldi, where he was Group Director of Marketing and Communications. At Asda, he was part of the team that revived the chain’s Rollback scheme, which is a key part of the ailing supermarket’s plan to win back shoppers from its rivals.

According to trade publication Retail Week, Hills is leaving to join airline and holiday company Jet2 amid a wider shake of senior staff members at Asda.

An Asda spokesperson is quoted as saying: “Earlier this year, David Hills informed us of his decision to join Jet2. David will remain with Asda until later this year and we will announce his replacement shortly.”

Last week, the retailer announced another round of price cuts as part of a move to shift its entire offering to a new low ‘Asda Price’ by the end of 2026, with the aim to be 5% to 10% cheaper than its rivals

Asda’s Chairman, Allan Leighton, said earlier this month that he had “a pretty significant war chest” to tackle several years of weak trading at the supermarket. He also promised “a big investment” in the business even though it would “materially reduce our profitability this year”.

Meanwhile, Asda announced yesterday that its staff will receive an above-inflation pay increase of 4.7% in three phases, taking rates from £12.04 to £12.60 per hour. Hourly rates for workers inside the M25 will rise to £13.82.

Hayley Tatum, Chief People Officer at the supermarket, said: “We’re proud to have invested more than £500m in retail pay over the last four years. Our colleagues are what makes Asda special, and this latest pay investment, plus an increased colleague discount and enhanced family-friendly policies, recognises the key role they play in serving customers each day.”

NamNews Implications

• Worth assuming that a search for a replacement has been underway ’since early this year’.
• And it will probably take at three months to fill the role, at least!
• Meanwhile, Asda NAMs will have to find ways of covering the gap by adding more customer management rationale to their side of the interface.
• (i.e. driving customer loyalty, customer acquisition and customer retention).
• Unless they prefer to leave that opportunity for a rival…?

Billions Wiped Off Value Of Leading Supermarkets Amid Fears Of Asda-Led Price War

The value of shares in Tesco, Sainsbury’s and Marks & Spencer has fallen by a total of around £3.5bn since Friday afternoon amid fears that Asda will sacrifice profit in a grocery price war to win back market share.

Tesco took the biggest hit; its share price was down 10% by lunchtime today, while Sainsbury’s slipped 8%, and Marks & Spencer’s fell 7%.

The drops came after Asda said its profits were likely to fall this year as it invested more in cutting prices and overhauling its operations to tempt shoppers back to its stores.

Analysts stated that it was likely that Tesco and Sainsbury’s profits would be squeezed by having to lower prices to compete.

Frederick Wild, a retail analyst at Jefferies, said it was clear that “market conditions are changing rapidly”, meaning the value of the listed grocers was likely to remain under pressure in the short term. “We would be more sceptical of any grocer found to be flat-footed in this changing environment,” he added.

However, Wild said it was “far from clear whether Asda has the ability to commit to the scale of cuts outlined on Friday if volume growth does not improve measurably in the coming weeks and months”.

Asda’s new Chairman, Allan Leighton, said on Friday he had “a pretty significant war chest” to tackle several years of weak trading at the supermarket.

In January, he reintroduced the ‘Rollback’ promotion of the 1990s. With an average reduction of 25% across 4,000 products, Rollback has now been expanded to roughly a quarter of Asda’s entire range, with it planning to add thousands more products at regular intervals to move its entire offering to a new low ‘Asda Price’ by the end of 2026.

Leighton told reporters at the end of last week that the aim was for Asda to be 5% to 10% cheaper than its rivals, though regaining customers’ trust would take time.

Clive Black, the head of research at Shore Capital, said Asda had made a “clear and necessary indication of intent to invest in the price and proposition” but this was “set against a sceptical and reluctant supply chain”.

He said he was holding profit predictions for Tesco and Sainsbury’s at present. “Irrational contagion [on price cutting] lowering gross margin and earnings is the greatest concern, but we need to remember too that the listed players are better grocers than Asda with a broader customer set, stronger balance sheets and a will to remain competitive, too,” Black added.

NamNews Implications:

• We are now entering ‘who blinks first?’ territory…
• One consequence has to be consumer reaction:
• “How can they afford a 25% average price reduction (when operating at a loss)?”
• Moreover, retailers that follow Asda may be subject to similar accusations.
• All leading to distrust of the retail brand…
• …with a knock-on impact on share prices.
• ...as Asda could be entering the ‘last chance saloon’?

Asda’s Chairman Pauses Search For CEO As He Makes Progress With Recovery Plan In A Race Against Time

Asda has “paused” its long-running search for a Chief Executive as new Chairman Allan Leighton implements his turnaround plan for the struggling supermarket.

Asda has now been without a permanent CEO since the abrupt departure of Roger Burnley in August 2021 and Mohsin Issa stepping back late 2024.

In an interview with The Times last week, Leighton said: “I’m going to take another couple of months to see what it is we need.

“It’s very important to get somebody, and to get a team, that is going to be here for the next 5, 7, 8 years".

He added: “It is about getting the range right, getting the price right and getting the availability right. And we’ve got to win the hearts and minds back of our people. Why we are where we are is largely self-inflicted.”

Key steps:

• Revival Asda’s Rollback price-cutting campaign
• Restore a price 5 -10% price gap
• Ban Red signage
• Restore 98.5% availability vs 90%

However, he warned that it will take three to five years to fully restore Asda

Re Asda Finances: “Last time we put out our numbers, we had a billion of cash on the balance sheet. The last two or three years, we have probably generated £600m to £700m of cash flow. I’m not at all worried about it. What is our leverage? Three times. We have got £8.5bn of assets.”

A separate report by the Telegraph suggested that Asda’s high level of debt is putting pressure on executives to consider cashing in on the company’s sprawling property portfolio. In 2023, the company’s owners started looking into the sale and leaseback of various properties to help combat soaring interest bills on the debt.

Newsteer, which has been advising Asda on the latest land sales, recently issued a note to potential developers saying the supermarket had identified “surplus space” at stores in Slough, Reading, Burgh Heath near Epsom, Tilbury in Essex and Cardiff. Newsteer stated that developers could convert the car park land into new homes or shops that would sit next to the existing Asda supermarket.

A spokesperson for Asda is quoted by The Telegraph as saying: “It’s common practice for national retailers with large property portfolios like Asda, Tesco and Sainsbury’s to explore how best to make use of surplus land in their property estate. Prospective parties interested in these sites are advised to contact Newsteer.”

NamNews Implications:

• Asda is in a race against time…
• And ‘cutting’ can be the fastest approach.
• Meaning selling least profitable stores until a profitable estate remains.
• Meaning the use of store sell-off proceeds to pay down debt, thereby cutting the interest burden. 
• Meanwhile, cutting prices to a point that restores Asda’s relative competitive appeal and encourages profitable repeat sales.
• (never forgetting the PE exit strategy…)
• i.e. back to a race against time…

Asda Axing Bonus Payouts For Managers

Asda is reported to have told thousands of senior staff they will not receive their bonuses after a year of declining sales and market share.

According to The Telegraph, more than 10,000 managers have been told that they will not be rewarded with payouts owing to the supermarket’s faltering performance. Typically, managers expect to receive bonuses in the first three months of each year.

The newspaper noted that the bonuses are being axed just months after Allan Leighton returned to the retailer as Chairman, pledging to restore what he calls the “Asda DNA”.

The Telegraph stated that while slashing the bonuses could help fund price cuts that are part of Leighton’s turnaround plan, it is likely to hit already low morale on the shop floor.

A former senior Asda employee said: “Morale will be rock bottom. Even Allan won’t be able to pick them up from this. This will mean some of the top talent looking elsewhere.”

Fewer than half of workers said they were confident in Asda’s strategy in the supermarket’s most recent staff survey. It has also recently faced criticism from union chiefs over how it was making job cuts at its head office without forewarning.

One recruiter told the newspaper that the move on bonuses could lead to “anarchy” within the company. Senior managers are eligible for Asda’s bonus scheme and around 10% of its 134,500 employees received the award last year.

News that they will miss out this year comes just weeks after Leighton unveiled his first round of job cuts as part of a restructuring of its senior teams.

Leighton has warned that it could take as long as five years to revive the supermarket.

Clive Black, an analyst at Shore Capital, noted the new Chairman had injected “new energy”, but said what Asda needed was “a proper overhaul of the group’s engine, not just a 12-month service”.

Leighton is also under pressure to improve performance at a time of looming cost increases across the industry. Black said: “Costs are about to go a whole lot higher, with EPR [Extended Producer Responsibility scheme, a recycling levy], National Insurance and the National Living Wage.”

NamNews Implications:

• Morale impact:
• Good guys leave
• And those that cannot…
• And with the big cost increases yet to hit…
• i.e. EPR, National Insurance, National Living Wage
• (Meanwhile, the good guys apply to Aldi/Lidl?)

Asda Avoids Fine Despite Missing The Deadline For IT Upgrade

Asda has avoided a hefty penalty charge despite missing a target for separating its IT systems from former owner Walmart.

According to The Telegraph, the US retail giant has agreed to push back the deadline for the £800m project, which has seen Asda untangling thousands of programs responsible for checkouts, administration and payroll.

After being acquired by TDR Capital and the Issa brothers in early 2021, Asda had been aiming to complete the IT changeover, named Project Future, by February this year. Last month, industry sources warned that Asda risked millions of pounds worth of charges if it missed this target.

The Telegraph reported over the weekend that Walmart and Asda have now come to a revised agreement, including scrapping the February deadline. It follows a series of setbacks for the project, which had been touted as “mission critical” to Asda’s revival plans.

A spokesperson for Asda told the newspaper: “We continue to make good progress delivering Project Future and have successfully migrated large parts of our business to brand-new systems.

“We will continue to take a pragmatic approach when delivering the remainder of the programme, and Walmart continue to be incredibly supportive in every way in helping with the implementation.”

NamNews Implications:

• Meanwhile, given that their IT systems still need adjusting…
• …suppliers (and shoppers) may wonder about the effect on service level…
• …and react accordingly?

Asda Trialling Automated Sampling Machine

Asda has begun testing an automated vending machine that offers free samples to customers at its store in Pilsworth, Bury.

In report a report by trade publication The Grocer, the supermarket described the machine as a “first to market innovation” that could “revolutionise in-store sampling”.

To access a free sample, shoppers have to scan their Asda Rewards loyalty app. A screen on the machine also allows customers to browse ingredient and dietary information.

The first brand testing the new machine is Müller, which is offering shoppers free samples of its Frijj milkshake.

A spokesman for Asda told The Grocer: “We are trialling a digital sampling machine at our Pilsworth store so that customers can try newly launched products from our branded partners simply by scanning their Asda Rewards ID.”

Access to the machine is being offered by the supermarket’s retail media arm, LS Eleven Media Services, and aims to help brands “engage customers with dynamic content and product trials”.

NamNews Implications:

• If only Asda was not saddled with other distractions…
• i.e. we have seen some very original ideas coming from this beleaguered grocer…
• Anyway, key for suppliers in appropriate categories to ensure their access to these sampling machines.