- Fourth-quarter like-for-likes dive 5.8%
- Full-year like-for-likes down 4.7%
- Boss Andy Clarke warns 2016 will be “another tough year”
Asda has posted a 5.8% drop in fourth-quarter like-for-likes as the Walmart-owned chain remains under pressure amid the grocery price war.
Boss Andy Clarke today admitted 2015 had been a “difficult year” as competition has been “fierce”.
He told the media that the grocer’s latest quarterly results were “not what we forecasted”.
Clarke’s prediction that Asda had reached a “nadir” in its second quarter was proved wrong as like-for-likes in the 13 weeks to January 1 slid 5.8%. It marked the grocer’s sixth consecutive quarterly sales fall.
He explained the performance by flagging that Asda had been “surprised” at the amount of alcohol promotions its rivals had run at Christmas.
Full-year like-for-likes came in down 4.7%, after a 4.5% decline in its third quarter and 4.7% drop in its second quarter.
Clarke added: “The UK retail market is continuing to undergo significant and permanent structural change, competition in our sector has been fierce and our market share has come under pressure.
“In that context, our results for the year have been commendably stable, balancing investment in our customers with disciplined financial management in a period when many of our competitors have suffered severe falls in profitability.”
Finance boss Alex Russo said Asda’s profits had been “stable” throughout the year despite the declining like-for-likes.
Asda last month revealed plans to cut hundreds of head office jobs and is consulting on the future of 5,000 store staff.
It also revealed last month it is investing an extra £500m in slashing prices.
Last October Clarke launched a new strategy called ‘Project Renewal’ in a bid to get the grocer back on track. As well as investing in price, Asda is also overhauling its range and its stores.
Clarke said today: “Project Renewal is the right strategy to get us back on the front foot, using our market-leading value proposition to give our customers low prices and unbeatable value.”
The supermarket price war shows no sign of abating this year as rivals Morrisons and Aldi have clashed over their latest price campaigns.
Clarke warned today it will be another tough 12 months.
“While I am cautiously optimistic that our sales will gradually improve, it won’t happen overnight given that 2016 is likely to be another tough and competitive year for the sector as a whole,” Clarke said.
Asda today also revealed plans to add four more Decathlon store-in-stores to its larger shops, building on a pilot in Watford.