Asda blames ‘challenging market conditions’ for sales slump

The Walmart-owned supermarket chain today posted a 1.3% decline in like-for-like sales excluding petrol for the period between October 1 and December 31, 2019.

The grocer highlighted that its clothing offer had been impacted by “challenging market conditions”, but trumpeted the growth of its core food business, which “proved more stable”.

Asda said the period also saw “continued progress in Asda’s strategy of winning on price, delivering an easy shopping experience and growth where customers are”.

The retailer said its home shopping operation delivered 10.3% growth year on year for the quarter and it refreshed seven stores across its UK estate – including a £5m refurbishment of its Edinburgh Jewel store.

Chief executive Roger Burnley said: “We know that our customers’ mindsets during the quarter were cautious and whilst customers were enthusiastic for Christmas, they were more mindful in their spending – with many choosing to pare back gift lists and focus presents on kids rather than adults and extended family.

“Our monthly income tracker showed that whilst disposable income remained stable at around £217 a week during the fourth quarter, previously seen trends of growth are starting to slow, and consumers remain highly budget-conscious.”

According to the most recent Kantar grocery data, Asda’s poor end to 2019 has continued with a slow start to 2020.

Asda saw sales fall 2.2% in the 12 weeks ending January 26, 2020, despite overall supermarket sales inching up 0.3%.

Grocery sales were boosted during the period by consumer spending on health-conscious items such as non-alcoholic beer and vegan food, such as soya mince and vegetarian burgers and sausages.