Retail Giant Asda Launches Major Cost-Cutting Drive Following Christmas Sales Slump

In a significant move to address declining performance, Asda, one of Britain’s largest supermarket chains, has initiated sweeping cost-cutting measures following a disappointing Christmas season that saw sales plummet by 5.8% in the 12 weeks leading to December 29, 2024.

Under the leadership of newly appointed chairman Allan Leighton, the supermarket has already begun implementing structural changes, starting with the departure of 13 regional managers. This restructuring has consolidated the management of supermarkets and express stores into 22 sub-regions, down from the previous 30, effectively reducing the number of regional managers while expanding their responsibilities.

The latest round of cuts follows November’s controversial decision to eliminate 475 positions at the company’s head offices in Leeds and Leicestershire without a consultation period. Additionally, the retailer has implemented a new hybrid working policy requiring staff to work in-office for a minimum of three days per week, affecting over 5,000 head office workers.

These measures come as Asda grapples with its lowest market share in over a decade, which has fallen to 12.5%. The decline has been particularly pronounced since the company’s £6.8 billion acquisition by TDR Capital and the Issa brothers in February 2021, during which time its market share has dropped from 14.6% to 12.6%.

In an attempt to win back cost-conscious shoppers, Asda has launched an aggressive pricing strategy dubbed “The Big Jan Price Drop,” featuring average reductions of 26% across more than 2,560 essential items. This initiative includes significant discounts on popular products such as Cathedral City Mature Cheddar and Persil Wonder Wash, as the company attempts to reinvigorate its “Asda price” proposition.

Despite these challenges, Asda has maintained its commitment to community support, announcing a partnership with FareShare to donate over one million meals during the start of 2025 as part of their Winter Fruit and Veg Pledge. The initiative will provide 420 tonnes of fresh produce to various charitable organizations across the UK.

The supermarket’s struggles reflect broader changes in the UK retail sector, with increasing competition from discount chains like Aldi and Lidl forcing traditional retailers to adapt. Industry analysts suggest that while cost-cutting measures are necessary, Asda must also focus on innovation and customer experience to regain its competitive edge