Asda to harness power of fresh produce in bid to become UK’s second biggest supermarket

Asda has unveiled plans to overtake Sainsbury’s as the UK second-largest supermarket chain, behind Tesco.

Speaking to The Sunday Times, owner Mohsin Issa said: “We are happy to commit whatever we need to get to that position. It’s not like we have got a clear five-year ‘get out’ plan; we and TDR have bought this business for the long term.”

Part of the plan to grow the business includes expanding Asda’s convenience arm. The billionaire Issa brothers, who made their fortune in garage forecourt business EG Group, have opened 31 Asda convenience stores on EG forecourts and plan to have more than 300. Meanwhile, the brothers are also introducing dedicated greengrocers in its stores. By next month, 250 Asda stores will have dedicated “greengrocers” working in fruit and veg departments.

Despite this focus on raising quality levels, Mohsin Issa insisted that Asda would not be abandoning its low-price heritage. The supermarket’s entry-level “Smart Price” range is being revamped and from May will be widened to cover more than 300 products, up from 200 today.

However, Asda’s current performance is less than desirable, with sales falling 5.5% in the 12 weeks to February 20 of this year, according to Kantar Worldpanel data. Based on a two-year comparison, which strips out the impact of Covid lockdowns, Asda’s 4.3% growth is barely half that of the market as a whole.