Asda Sales Plummet Amid Identity Crisis

Asda's sales have seen a substantial decrease, with the UK's third-largest supermarket losing £2 million per day compared to the previous year. Over the 12 weeks leading up to January 25, sales dropped to £4.32 billion from £4.49 billion. This represents a 3.7% fall, equating to a daily loss of £2 million. Five years ago, Asda's sales for the same period were nearly £6 million higher per day.

The retailer is struggling against both traditional rivals such as Tesco and Sainsbury's, which reported sales growth, and discounters like Lidl, which saw a 10.1% rise. Asda's market share has consequently shrunk from 12.3% to 11.5% in the past year.

Chairman Allan Leighton acknowledged the challenges, noting that the supermarket is over a year into a three-to-five-year revival mission. This effort aims to rebuild the customer base, which was impacted by a botched IT transformation, codenamed 'Project Future,' rolled out last summer. The upgrade caused inconsistent stock availability and a poor online customer experience.

Analysts describe Asda as being in a 'profound identity crisis,' having lost its traditional positioning as the 'working family's best friend.' Rivals have leveraged savvy loyalty schemes, pulling ahead while Asda grapples with empty shelves and IT system issues.