Aldi is poised to overtake ASDA as Britain’s third largest supermarket chain within five years

ASDA is on the verge of losing its position as Britain’s third largest supermarket chain, according to an analysis by GlobalData, a leading data and analytics company. Aldi will overtake it in 2028.

The forecast comes as ASDA struggles with a range of challenges, including leadership turmoil, industrial disputes and shrinking market share in an increasingly competitive retail environment.

ASDA’s problems stem in part from its former ownership of Walmart, which the grocer sold in 2009. Since then, ASDA has struggled to break away from Walmart’s legacy, including a costly £800 million separation of IT systems that has been underway since 2021.

Eleanor Simpson-Gould, Senior Retail Analyst at GlobalData, highlighted the crucial need for ASDA to redefine its value proposition to differentiate itself from discount competitors such as Aldi. “ASDA must redefine itself with clear differentiation from discounters to secure its position in the UK food and supermarket market,” said Simpson-Gould. “The grocer must focus on its online capabilities this year to reposition itself as a dominant player in the market and differentiate itself from Aldi. Without immediate action, the country risks leaving the coveted position of the ‘big three’ even sooner.”

Internal tensions within ASDA have been exacerbated by disappointing sales performance, leading to public criticism of chairman Lord Rose and calls for majority shareholder Mohsin Issa to step away from running the company. These leadership disputes, coupled with strained employee morale and the recent strikes, have further complicated ASDA’s path forward.

In response to mounting pressure, ASDA has implemented emergency measures, including a £30 million investment to ensure there are sufficient staff at checkouts over the weekend, better stocking of stores during the day and improvements to store cleanliness. However, these efforts are considered by some to be insufficient to truly compete with discount giants such as Aldi and Lidl.

Simpson-Gould stressed that ASDA must provide shoppers with a more compelling reason to choose its stores over competitors. “For ASDA to really resonate with consumers, it must provide a compelling reason for shoppers to spend money,” she noted. “An intensified focus on price and expansion of the core grocery range will be critical.”

As Aldi continues to gain ground, ASDA’s ability to adapt and innovate will be crucial to maintaining its position in the fiercely competitive UK supermarket market.