Asda chief sounds downbeat note
Sainsbury’s stronger over summer months, says Bond
Asda chief executive Andy Bond has said that rival Sainsbury’s may recover its position as the number two UK supermarket operator over the next few months
In an interview with the [i]Financial Times[/i], Bond, who was appointed to the top job at Wal-Mart owned Asda two months, said it may take up to 18 months for Asda to recover its sales growth momentum.
Grocery market share figures compiled by TNS show that over recent months Sainsbury’s has started to recover market share under chief executive Justin King. At the same time, Asda has seen its growth stall, squeezed not just by Sainsbury’s but by continued strong growth at market leader Tesco.
In the 12 weeks to May 22, TNS gives Tesco a 29.9 per cent share of the UK grocery market, with Asda on 1.5 per cent and Sainsbury’s on 15.9 per cent.
Bond told the [i]FT[/i]: “Sainsbury’s does better in the summer in fresh foods while we tend do better in the run-up to Christmas with non-food, so there is going to be ebb and flow this year. But you have got to admire what Justin King is doing. They could overtake us in the coming month.”
Asda’s response will include a new round of price cuts to improve its value position, as well as a drive to further reduce costs in the business. Asda confirmed this week that former logistics director David Cheesewright, who moved from Asda to run Wal-Mart’s Canadian business last year, is returing to the UK as part of a drive to reinforce Asda’s senior team.
Bond said: “Some things could go in our favour but others could go against us, such as the general state of the economy.
“I don’t see general consumer spending improving quickly, and I think the rest of the year will be difficult for us. There are things we need to do and I think it will be a 12 – 18 month timeframe to get back to the place we should be.”
