UK’s biggest supermarkets suffer £4bn hit over Asda price war threat

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Hannah Boland

Mon, Mar 17, 2025, 5:21 AM 3 min read

Almost £4bn has been wiped disconnected Britain’s biggest supermarkets amid fears implicit Asda’s plans to motorboat a market terms warfare arsenic it battles to triumph backmost shoppers.

Shares successful Tesco, Sainsbury’s and Marks & Spencer tumbled connected Monday, with M&S and Tesco the 2 biggest fallers connected the FTSE 100 scale of Britain’s biggest listed companies.

It came aft Asda fired a informing changeable to its rivals connected Friday, unveiling caller plans to propulsion done a “substantive and well-backed programme of investment”. Since the announcement, shares successful Tesco person plunged 11.5pc, with Sainsbury’s 8.5pc little and M&S down by 7.5pc.

Allan Leighton, who returned to Asda arsenic its president past November, said a caller “war chest” of concern would assistance the supermarket summation backmost customers aft years of decline.

Its marketplace stock has slipped to 12.6pc from 14.6pc erstwhile it was bought by backstage equity elephantine TDR Capital and the Issa brothers successful February 2021, according to manufacture data. The figures published by Kantar suggested income were down a further 5pc year-on-year successful the 4 weeks to Feb 23.

Analysts astatine Jefferies said the propulsion to triumph shoppers backmost would apt beryllium felt “across the industry”, adding that Tesco and Sainsbury’s had been “major beneficiaries of marketplace stock from Asda implicit the past mates of years”, with Asda expected to beryllium pushing to get those customers back.

The analysts suggested that a large interaction would apt beryllium astir margins arsenic Asda prepares to footwear disconnected a fierce terms war, “especially if Tesco (as seems the lawsuit truthful far) declines to fto them bargain a march connected pricing”.

Clive Black, of Shore Capital, added: “Could Asda’s actions mean greater terms contention that squeezes the margins of others?”

Mr Leighton said connected Friday that his plans for Asda would mean “resetting the business”, with large concern going towards cutting prices, improving availability of products and modernising its stores.

While Asda declined to accidental however ample the concern would be, it said spending plans would pb to a “material reduction” successful profitability.

However, Mr Leighton said they would marque Asda “incredibly competitory again” astatine a clip erstwhile customers were looking for value.

Speaking to The Telegraph, helium said helium would not beryllium making speedy fixes, adding: “I could get the income up time by doing a load of promotions – but that is not the answer.”

Already nether Mr Leighton, Asda has brought backmost its “Rollback” programme connected prices, wherever products are reduced for 12 weeks and past a caller terms is set. The promotion was archetypal introduced successful the mid-1990s. Mr Leighton ran Asda betwixt 1996 and 2000.