- £500m investment part of “radical action” to win back customers
- Walmart-owned chain has reported five consecutive quarters of falling sales
- Andy Clarke warns of more “turbulence” in short term
Asda boss Andy Clarke has unveiled an extra £500m investment to cut its prices but warned of more “turbulence” for the struggling grocer.
Clarke, who reported a fifth consecutive quarterly sales drop for the Walmart-owned chain in November, flagged that 2016 will be another year of “intense pressure” for the sector.
Asda’s boss said the £500m price pledge was part of “radical action” to win back customers from the discounters and rivals.
Along with the rest of the big four, Asda has suffered at the hands of the discounters. Kantar figures released last month showed Asda’s sales fell 3.4%, while Lidl’s sales jumped 17.9%.
Asda’s latest price investment is on top of the original £1bn over five years it announced in 2013.
“There is currently no growth in the food market and the rise of the limited assortment discounters means that we must take radical action to win back our customers,” said Clarke.
He added: “Our eyes are open to the fact that more impactful changes and decisive action still needs to be taken to make sure we remain not only a viable business, but a strong market-leading one.”
The grocer also revealed that it is joining Europe-wide buying alliance EMD, which pools the collective buying power of 250 supermarket chains. This will also include developing Asda’s own-label ranges, including Extra Special.
Asda will report fourth quarter and full-year strategy results on February 18, alongside its parent company Walmart.
Rivals Morrisons, Sainsbury’s and Tesco all report Christmas trading figures this week.