Asda will unveil its second-quarter results on Tuesday with boss Andy Clarke coming under increasing pressure at the supermarket giant.

Asda will unveil its second quarter results on Tuesday with boss Andy Clarke under increasing pressure at the supermarket giant.

According to the latest Kantar Worldpanel data, Asda lost its place as the UK’s second biggest grocer to Sainsbury’s in the 12 weeks ending July 19, following a 2.7% slump in sales. That made it the worst performing member of the big four.

Analysts will have a close eye on tomorrow’s second-quarter results for signs that Asda can turn the corner and return to sales growth. Here are our top five things to look for.

Investment in stores

At its full-year results briefing back in February, Clarke said Asda would be investing £600m into its store estate during 2015, including 17 new store openings and 62 “major remodels” to “reflect changing shopper habits”.

Clarke has made no secret of the fact that he is pursuing the idea of opening concessions in its larger sheds and the grocer is already testing a partnership with sports retailer Decathlon at its Watford Supermarket. An update on the future of that tie-up could be on the horizon, five months after Retail Week first revealed the deal.

Asda has already been looking at “sectioning off” certain parts of bigger stores to pave the way for further shop-in-shop deals and has also been revamping the layout of supermarkets to make them more convenient for shoppers. Analysts will be looking for any positive sales updates from stores that have benefitted from such changes.

A separate part of that investment has seen Asda open its first batch of smaller high street stores, marking its first foray into the convenience sector – although the grocer refuses to refer to the new format specifically as a c-store.

The first two shops of that kind, in Deptford and Wealdstone, opened for business last month and a potential positive update on their trading to date could provide a vital lifeline to Clarke during a turbulent period. Further news of plans to roll-out the format across London or the rest of the UK could also be forthcoming.  

Investment in price

Asda invested £300m in price during 2014 – £100m more than initially planned. That forms part of a wider five-year pledge to plough £1bn into price.

Despite the huge scale of that investment, sales have been falling at the supermarket giant. Kantar figures are the latest demonstration of that, following a full-year like-for-like drop of 1% in the 52 weeks to December 31 2014 and a 3.9% slump during its challenging first quarter.

The big question being asked is: why has that happened despite such heavy investments in price?

Could it be that sales are actually improving, or at least holding steady, in categories that have benefitted from price cuts? Clarke will surely be keen to champion that fact, if indeed it is the case.

With hundreds of millions more set to be thrown into reducing prices for its shoppers, details could emerge as to what areas have been earmarked for future investment and the impact bosses hope this will have.   

Hunt for a chief operating officer

It is now more than six months since Asda revealed that its chief operating officer Mark Ibbotson was heading to the US to take on a role at its parent company Walmart, where he will steer innovation.

Ibbotson played a key role at Asda since joining the grocer in 2004, spearheading a raft of modifications in its bid to adapt to shopping habits. He expanded Asda’s online and click-and-collect operations, while also playing a leading role in the supermarket giant’s restructure to reflect the multichannel shift – a scheme that saw 1,360 head office staff made redundant.

Ibbotson’s work at driving efficiency and building Asda’s online presence means much thought and consideration is rightly going in to appointing his successor, but tomorrow would be the ideal time for Asda to unveil his replacement or at least provide an update on its bid to fill the void.

Click-and-collect pod trial

Asda soft-launched a standalone click and collect pod in Lancashire in May. The supermarket giant said it was the first 24/7 grocery click-and-collect point in UK and sources told Retail Week it could roll the idea out across the country if it proved a success.

It allows customers to drive up to the site, scan a QR code and collect goods directly from a temperature-controlled unit.

After almost three months since the site in St Helens opened, Clarke could be in a position to provide an update on how popular the ‘pod’ has been and reveal further details on a potential roll-out.

As Asda looks to turn around a worrying period of sales declines, new formats like this could prove the catalyst to wooing shoppers back from the discounters.

Targets for the ‘golden quarter’

With Christmas now just a little over four months away, attention is quickly turning to the golden quarter – a time when Sainsbury’s has often managed to bridge the gap to Asda and momentarily leapfrog its rival to become the UK’s second biggest supermarket.

Sainsbury’s achieved that feat earlier than usual in 2015, a fact that has piled more pressure on Clarke to improve dwindling sales during the crucial upcoming period.  

Although it is yet to reveal any sales targets, Asda’s chief customer officer Barry Williams has come out fighting in the grocer’s bid to win back festive shoppers from the discounters, insisting it has “the best range assortment and the best value proposition.”

While it has already unveiled an eye-catching festive proposition, further marketing and customer experience initiatives may be needed to entice its customers back into stores and make Clarke’s Christmas a merry one.