Asda chief executive Andy Bond has warned that the chain’s position as the UK’s number two supermarket is under sever threat from Sainsbury’s.
Asda has held second place for two years, having expanded swiftly since US behemoth Wal-Mart took the reigns in 1999. However, a resurgence by Sainsbury’s in the last 12-18 months has coincided with a stagnation of sales performance at Asda and, significantly, the missing of internally set targets.
Asda has been criticised for its failure to move into the convenience sector, preferring to concentrate on the expansion of sales at its out-of-town store network. Bond admitted that its rivals have stolen a march and added that Asda has plans to open new smaller stores to up its market share.
In an FT interview, Mr Bond said it could be the middle of 2007 to get Asda's growth back on track. "We have bottomed out and Sainsbury's is back up the ski slope," he said. "We have been neck and neck for a long time and they may overtake us."
Sainsbury's sales increases are minimal when put into the context of Tesco, but they look impressive against Asda and Bond, who took over the hot seat March of this year, appears to be warning the city of a potential period of consolidation during the earlier part of his tenure.
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