UK Supermarkets See Shifting Tide As Asda Falters – MKS Shares Lead TSCO, SBRY, OCDO Through 2024

Supermarkets in the UK experienced a wave of increased sales over the summer period, largely thanks to a spike in demand fuelled by warm weather and the summer holidays. Notably, sales surged by 5.5% between July and August, with particular demand for products such as ice cream, water, and soft drinks.

Despite this overall industry growth, Asda, one of the leading supermarket chains in the UK, struggled to keep pace with its competitors. Over the latest 12 weeks, Asda's sales dropped significantly, falling by 6.4%. This decline has led to Asda losing a considerable part of its market share, which now stands at 11.8%, down by 1.3 percentage points.

While Asda faced challenges, its rivals made gains: Tesco, Sainsbury's, Waitrose, Marks and Spencer, Ocado, and Lidl all expanded their market shares during the same period. Ocado and M&S, in particular, were at the forefront of this growth, with both companies growing the fastest among the competitors.

Marks & Spencer shares (LON: MKS) are also the largest gainer on the London Stock Exchange of those listed through 2024. Gains of 20% in MKS share price this year stand above 17.5% for TSCO, and a loss of 5% for SBRY. Despite seeing market share growth, OCDO remains firmly red on the year, down 50% and taking an index shift out of the FTSE 100.

Mike Watkins, Head Insight at NIQ, provided commentary on the current retail landscape. He highlighted that retailers had managed to sustain shopper spending during the period of the warm summer boost. However, Watkins also cautioned that as the summer wraps up, there will be added pressure on these retailers. As the warmer season comes to an end, there is an anticipation that retaining this growth will become more challenging, especially with intensifying price competition on the horizon.

The contrasting fortunes of Asda and its rivals underscore the dynamic nature of the UK's retail sector. While external factors such as weather can provide a short-term uplift to consumer spending, underlying competitive positioning and strategic execution appear to be decisive in securing long-term market share gains.

As the industry prepares for a post-summer market environment, the focus is likely to shift towards price competition and value offers as key levers to attract increasingly cost-conscious consumers. The pressure will be on retailers like Asda to reinvent and reposition themselves to claw back their diminishing market share and reassert their relevance in the competitive UK supermarket landscape.