Asda reduces prices on 1,500 products to boost sales

Asda has announced it is cutting prices on 1,500 products as part of a strategy to stop falling sales. This decision comes in response to a price war that has significantly affected its competitors, leading to a loss of billions in their market values. The supermarket, which is the third largest in the UK, claims it has lowered prices on nearly 10,000 products since the end of January. The average price cut is about 22%, with some products seeing reductions of nearly 45%. Notable items included in these cuts are Cathedral City cheddar cheese and Head & Shoulders shampoo. Allan Leighton, the chair of Asda, stated that the company plans to keep lowering prices throughout the year and beyond to provide better deals for customers. Asda's move has had a ripple effect on its main competitors — Tesco, Sainsbury’s, and Marks & Spencer — which have collectively lost around £4 billion in stock market value after Asda warned of declining profits due to its investment in price cuts. While shares of these companies have seen slight recoveries, they remain significantly lower than before. Analysts predict that the cost-cutting measures by Asda will pressure Tesco and Sainsbury’s profits, making it harder for them to attract customers. Observers note that Asda is facing challenges beyond pricing, including issues with product availability and store cleanliness. The company, which is owned by TDR Capital, Mohsin Issa, and Walmart, has lost market share over the past year. Experts suggest restoring Asda’s performance could take up to five years.