Asda admits recovery efforts '˜not enough' after sales drop

Embattled supermarket Asda revealed another hefty sales slump as it said price cuts and turnaround efforts were 'not enough' to overcome its trading woes.

Asda has reported another quarter of falling sales. Picture: Lisa Ferguson

The chain – owned by US retail giant Walmart – posted a 5.7 per cent fall in like-for-like sales for the 13 weeks to 30 March, showing little improvement on the 5.8 per cent drop seen in its Christmas quarter, which was its biggest quarterly sales fall on record.

Brett Biggs, chief financial officer at Walmart, said: “The UK continues to struggle, due primarily to fierce competition.

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“Improvements in price and product availability throughout the quarter were not enough to overcome traffic and food volume declines in our large format stores.”

Asda also said it saw a 5 per cent drop in the number of shoppers visiting its stores in the first quarter.

But the chain said it remained focused on its revival plan, dubbed Project Renewal, which is seeing it pump £500 million into cutting prices for shoppers in a fightback against fellow “big four” grocers Tesco, Sainsbury’s and Morrisons, as well as discounters Aldi and Lidl.

It added it was on track with moves to slash costs, having announced in January it would cut hundreds of UK jobs, largely impacting its Leeds head office, which employs 3,000 people.

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Andy Clarke, president and chief executive, pledged to show shoppers a “new Asda face” through a revamped marketing push, led by a deal with TV chef James Martin.

The partnership will see Martin, who recently left the Saturday Kitchen show, provide recipes and cooking advice to families on a budget.

Clarke said: “A new approach to marketing, including our partnership with James Martin, will show customers a new Asda face which showcases the values on which we have built the business over the years and reinforces our everyday low price value.”

The latest trading fall marks the seventh quarter in a row of sliding sales. Asda has been losing ground to rivals amid a fierce price war, with recent supermarket share figures showing it suffered the most out of the big four.

Its share of the sector fell to 16 per cent in the 12 weeks to 26 April, down from 16.9 per cent a year earlier, according to Kantar Worldpanel. Falling sales saw Asda lose its position as Britain’s second-biggest supermarket to rival Sainsbury’s last year.

Morrisons, which has also been under pressure in recent years, posted its second quarter in a row of rising sales earlier this month as chief executive David Potts steers its turnaround.

But the recent Kantar figures showed all of the big four apart from Sainsbury’s suffered share falls amid the ongoing rise of Aldi and Lidl.