The latest data from Kantar Worldpanel reveals interesting insights into the grocery market as a whole, in addition to the expected rise in grocery price inflation since March last year.
Despite the overall price increase, Tesco and Sainsbury’s continue to dominate the market, pulling away from their competitors. Under the leadership of chief executive Simon Roberts, Sainsbury’s has seen a significant increase in its market share, rising from 14.8% to 15.3% during the 12-week period ending on August 4th.
This growth has largely come at the expense of the two other traditional ‘big four’ players, Asda and Morrisons. However, Morrisons, under the new leadership of chief executive Rami Baitieh, has shown signs of stabilization and even sales growth.
On the other hand, Asda appears to be struggling. Its market share has fallen from 13.7% to 12.6% in just one year, a significant decline from its previous position as the market’s second-biggest player.
Asda’s troubles can be traced back to its acquisition by private equity company TDR Capital and the Issa brothers in October 2020. The financial engineering involved in the deal, which heavily leveraged Asda’s business, has led to concerns about the company’s competitiveness and operational performance.
These concerns were further highlighted when well-regarded chief executive Roger Burnley stepped down, reportedly due to disagreements with the new owners. Asda’s failure to appoint a successor and the subsequent resignation of Zuber Issa from the board have only added to the instability within the company.
While Lord Rose, Asda’s chairman, and chief financial officer Michael Gleeson have been trying to keep the company afloat, it is clear that a full-time experienced retail executive is needed to turn things around. As Lord Rose stated in a recent interview, “Mohsin’s work is largely complete” and it is time for someone else to take the reins.
The success of Morrisons, despite also being acquired by private equity and loaded with debt, can be attributed to the stability provided by its experienced leadership team. With former Tesco chief executive Sir Terry Leahy as a senior advisor, Morrisons has seen a turnaround under the leadership of Rami Baitieh.
In comparison, Asda’s owners have been described as “aloof” and “frosty” when it comes to interacting with employees and the company’s brand and identity have been called into question.
However, there is still hope for Asda. The company has several high-profile recruits set to join in the near future and has recently announced an increase in checkout staffing, showing a willingness to listen to customer feedback.
But the need for a full-time chief executive is apparent and urgent. Asda must act quickly to address its operational and leadership issues if it hopes to regain its competitive edge in the grocery market.
