- Asda like-for-likes slump 5.7% in its first quarter
- Seventh consecutive quarter of falling sales
- Parent Walmart admits it has suffered from “fierce competition”
- Follows a 5.8% plummet in sales during the final quarter of last year
Asda has posted a 5.7% slump in first quarter like-for-like sales as the grocer continued to struggle amid “fierce competition”.
The supermarket giant’s parent company Walmart insisted investment had been made into price and availability during the 13 weeks ending March 30, but admitted that was “not enough to overcome traffic and food volume declines in our large format stores”.
It comes off the back of a turbulent year for the grocer, which posted its worst ever quarterly sales performance in the final 13-week period of 2015.
Like-for-likes slumped 5.8% in the period ending January 1 to round off what the grocery labelled a “difficult” 12 months.
Operating profits fell in the period, but no figure was disclosed.
Boss Andy Clarke had previously dubbed Asda’s 4.7% drop in second quarter sales as the grocer’s “nadir”, but despite displaying “green shoots of recovery” during its third quarter – when like-for-likes fell 4.5% – the retailer lost sales to big four rival Tesco and the discounters during the crucial Christmas trading period.
Clarke said: “Sales volumes for the period reflect the impact of deflationary prices and competitive market conditions. The implementation of Project Renewal continues, including the roll-out of a comprehensive programme to re-lay and update our stores to improve the customer experience, reduce complexity and streamline ranges.
“A new approach to marketing, including our partnership with James Martin, will show customers a new Asda face that showcases the values on which we have built the business over the years and reinforces our everyday low price value proposition. Independent surveys show that we have again narrowed the price gap with the limited range discounters and are significantly cheaper than our major competitors.”
Walmart chief financial officer Brett Biggs added: “The UK continues to struggle, due primarily to fierce competition.
“Improvements in price and product availability throughout the quarter were not enough to overcome traffic and food volume declines in our large format stores.”
Clarke is spearheading Asda’s Project Renewal initiative, an 18-month turnaround plan designed to “better address the fast-changing needs of its customers”.
The supermarket giant has already hit the pause button on its click-and-collect roll-out, pledged to revamp 95 of its larger stores and axed 280 jobs across its store operations as it strives to transform its fortunes.
Asda has also drafted in chief customer officer Andy Murray from parent Walmart in a bid to reconnect with its core customer base.
Speaking at Retail Week Live back in March, Murray said he would prioritise revamping Asda’s own-label proposition and making more out of the grocer’s “assets”, including its Asda Price slogan.