Most years it’s difficult to identify the winners and losers over the festive period. You have to analyse the analyses and even then you’re never dealing with a level playing field as different managements use different timescales for ‘The Festive Season’ to suit the optics around their business.
There is a common agreement for Christmas 2024 that in the world of bricks and mortar Marks & Spencer will be happy and within the traditional supermarkets the big winner was Tesco. It was a tough market as overall shop sales fell 0.3% in December which incorporated the lowest level of food sales for 10 years.
Some chains did OK with Aldi and Lidl increasing their market share along with J Sainsbury. Of the two high profile strugglers Morrisons did best, clawing their way to +0.4% despite their IT issues.
It's the second of those strugglers that has had the biggest light pointing at them. The beleaguered Asda had a terrible time. The business is struggling to reverse the precipitous decline delivered by Lord Rose and the Issa Brothers and the 5.8% sales slump over the Christmas period reduced their market share to 12.5%. That’s less than half Tesco’s 28.5% and getting a bit too close for comfort to Aldi’s 10%.
Back to the future
Allan Leighton has brought back the Rollback promotional campaign first introduced when he ran the business in the late 1990s
Newish Asda chairman, former chief executive Allan Leighton, has seemingly decided that his best chance of reversing the chain’s decline is to "Get The Band Back Together".
Here comes the new boss – same as the old boss as someone once sang. LinkedIn has seen a number of former Asda employees returning to the fold, no doubt at Mr Leighton’s request.
He has been quoted as saying that it could take five years to restore the chain’s fortunes. Perhaps he’s after a five-year contract? Or he just wants to buy time from the chain’s VC owners? Either way, despite the old guard recruitment, the business is still without a chief executive four years after Lord Rose started looking.
That tells you all you need to know about how experienced executives view the prospects of the business. It’s reported that there is an up to £10 million pay package on the table and also that candidates were put off by having to work with Mohsin Issa, so I’m guessing that progress may now be made now he has exited day to day involvement.
The other block still remains though – fighting on a price platform whilst weighed down by the £ billions loaded onto the business by TDR Capital and the Issa Brothers when they took it over in 2021.
As well as getting the people band back together Mr Leighton also believes that the old marketing messages will work as well now as they did in years gone by. Out is going the Aldi/Lidl price-match campaign and back is coming RollBack. The trade press has short odds on the ‘Asda Price’ back pocket tapping campaign coming back as well.
It's rarely dull in the UK food and drink market and 2025 is shaping up to be another year of ‘interesting times’ for Asda. Once a business starts declining it is incredibly hard to reverse that momentum so it seems clear that Asda and Morrisons will continue to be the ‘story’ this year.
* Keith Webb provices management and board advice to food, retail and drinks companies through his own consultancy business. He can be contacted at keithwebb860@btinternet.com.
