Asda feels the heat as rivals poach its customers

Interesting counterpoint to the Budget today as research firm Kantar suggests that grocery shoppers are continuing to trade up, with Sainsbury’s and Waitrose continuing their growth but Asda falling back. But how long will this be the case?

According to Kantar, Asda has been losing share for six months and is now only 0.5 points behind Sainsbury’s at 16.7 per cent of the market, the smallest gap between Asda and Sainsbury’s since December 2007.

The problem is not just that consumers have been trading up. Asda has been squeezed by the cheaper lines of its competitors, after it had the value-for money proposition virtually all to itself for several years. With Sainsbury’s, Morrisons and even Waitrose all offering value-for-money deals for shoppers with tight budgets, this sector of the market has become crowded and very competitive.

And with George Osborne’s painful medicine really kicking in next year it looks as if many consumers will be contradicting Kantar and opting for value rather than premium lines.

All of which will give the retailers and their branding and ad agencies plenty of problems to ponder as they fight for the shopper’s pound.

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About David O'Reilly

David is a former deputy editor of Campaign and writer for a number of leading titles including Management Today and the Sunday Times. He is a partner in The Editorial Partnership.