Billions wiped from UK supermarket stocks this week as Asda gears up for a price war

For years, the big four — Tesco, Sainsbury’s, Asda, and Morrisons — dominated the UK supermarket scene. But the rise of the discounters, chiefly Lidl and Aldi, and the continued improvement of online services like Ocado have slowly turned the industry on its head.

Every little helps (the bottom line)

From milk price wars to the recent phenomenon of needing to sign up to a loyalty scheme for any of the best deals, the competition for customer loyalty has been fierce for a while. That’s arguably never been more true than it is in 2025, with billions of pounds wiped from Tesco, Sainsbury’s, and Marks & Spencer stocks this week, after Asda said it was going to invest heavily to cut prices and employ more staff across its 1,100-plus stores this year — even if it hurts its bottom line in the short term.

It takes a lot to knock 12% off the value of Tesco, the UK’s largest supermarket with ~28% market share, but that’s what the announcement did between last Thursday and Monday — a reflection of just how seriously the market is taking Asda’s price cut strategy. Per The Guardian, Asda has seen its market share drop from 15.1% to 12.6% over the past five years, and its new private equity backers and chairman Allan Leighton, who was Asda’s CEO until 2001, clearly see price cuts as a route back to growth.

For investors, that could mean another spell of intense price-cutting competition, which would squeeze margins. For consumers, it might mean a few more bargains… if you’re willing to shop around and sign up for 12 different loyalty schemes.