Finance
UK Supermarket Asda Cuts Prices to Kick Start Recovery
Published by Global Banking & Finance Review®
Posted on January 30, 2025
2 min readLast updated: January 27, 2026
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Asda introduces major price cuts on 4,000 products to regain market share, aiming to become the UK's cheapest traditional supermarket.
UK supermarket Asda cuts prices to kick start recovery
By James Davey
LONDON (Reuters) - British supermarket group Asda on Thursday launched a major round of price cuts, with "a significant investment" its new boss hopes will kick start a recovery for the current industry laggard.
In November, retail veteran Allan Leighton returned to Asda, Britain's third largest grocer, as executive chairman more than two decades after he served as CEO when he turned around the business before selling it to Walmart.
Industry data published this month showed Asda's sales plunged 5.8% in the 12 weeks to Dec. 29 year-on-year, with a 1 percentage point loss of market share over the year.
On Thursday, Leighton said Asda, majority owned by private equity firm TDR Capital, was cutting the prices of over 4,000 products across every category in the store, with an average discount of 25% - reintroducing the "Rollback" promotional mechanism that was first used in the 1990s.
Examples of price cuts include Asda Thin Cut Beef Steaks (400g) reduced by 36% to 3.88 pounds ($4.82) and Ben & Jerry's Luxury Ice Cream Cookie Dough (465ml) reduced by 44% to 2.84 pounds.
Leighton said Asda was lowering prices throughout stores and online to make it "the cheapest traditional supermarket" - a title market leader Tesco says it has held for over two years.
Shore Capital retail analyst Clive Black said shares in Tesco and No. 2 Sainsbury's would likely be marked down in early trading on Thursday on the back of Asda's move.
"Asda had to do something, it's been ceding enormous market share losses for some time," he said.
"But it's not just about price, Asda's stores have been dirty, availability's been poor, customer service has been weak and morale has been low, so they also have to address those issues."
Asda has simultaneously abandoned a scheme, introduced last January, that matches the prices of discounters Aldi and Lidl on hundreds of comparable grocery products.
Walmart retains a 10% stake in Asda.
($1 = 0.8044 pounds)
(Reporting by James Davey)
Key Takeaways
- •Asda launches significant price cuts across 4,000 products.
- •Average discount is 25%, reintroducing 'Rollback' promotions.
- •Allan Leighton leads the recovery strategy as executive chairman.
- •Asda aims to become the cheapest traditional supermarket.
- •Price cuts may impact competitors like Tesco and Sainsbury's.
Frequently Asked Questions about UK supermarket Asda cuts prices to kick start recovery
1What recent action did Asda take to improve sales?
Asda launched a major round of price cuts, reducing prices on over 4,000 products by an average of 25%.
2Who is the new executive chairman of Asda?
Allan Leighton returned as executive chairman of Asda, having previously served as CEO over two decades ago.
3How has Asda's market share changed recently?
Asda's sales plunged 5.8% year-on-year, resulting in a 1 percentage point loss of market share.
4What are some specific examples of Asda's price cuts?
Examples include Thin Cut Beef Steaks reduced by 36% to 3.88 pounds and Ben & Jerry's Ice Cream reduced by 44% to 2.84 pounds.
5What challenges does Asda face beyond pricing?
Asda has issues with store cleanliness, product availability, customer service, and low employee morale that need to be addressed.
