In an urgent plea for intervention, the GMB union has spotlighted the precarious position of supermarket giant Asda, demanding immediate measures from the company’s owners to secure the livelihoods of its workforce. Recent figures unveiled a troubling 6% dip in Asda’s sales for the quarter ending on 4 August, a decline that not only persisted amidst rising grocery prices but also reduced its grip on the UK’s grocery market to a 13-year low of 12.6%. This marks a significant fall from the 13.7% market share recorded the previous year, highlighting a continuous descent over five months, as reported by Kantar analysts.
The turbulence at Asda follows its acquisition by the Issa brothers from Blackburn and the private equity firm TDR Capital for £6.8bn in October 2020, which has since seen a period of executive upheaval. Zuber Issa is in the process of selling his 22.5% stake back to TDR, with Mohsin Issa anticipated to reduce his operational involvement upon completion of the transaction this autumn. The GMB, representing a significant number of Asda employees, is set to approach government ministers to voice concerns over job security and consumer value, attributing the retailer’s struggles to TDR Capital’s management and financial strategies.
According to the union, such strategies have compromised the company’s standards, eroding customer trust and contributing to its market share decline. Over the weekend, Asda’s chair, Stuart Rose, expressed his dissatisfaction with the company’s performance under his tenure, hinting at a need for Mohsin Issa to diminish his role to facilitate the recruitment of a seasoned executive capable of steering Asda back to prosperity. This suggestion comes amidst reports of internal discord between the Issa brothers, although such claims have been denied by Mohsin Issa, who asserts a strong relationship between the siblings.
An Asda spokesperson acknowledged the need for improvement, outlining the company’s investment plans, which include a £30m boost for store enhancements and IT advancements to aid in the separation from Walmart, its former parent company. Despite its current challenges, Asda remains the UK’s third-largest supermarket, with a spokesperson highlighting a 2% growth in revenue (excluding fuel) in the first half of 2024 and positive trajectories in its online and George clothing divisions. TDR Capital, while declining to comment on the GMB’s critique, previously defended its stewardship of Asda, citing expansions and innovations such as the growth of Asda’s store count and the launch of a loyalty app with 6 million active users.
News Team
