- Asda suffers worst ever fall in quarterly like-for-like sales
- Same store sales tumble 7.5% in three months to the end of June
- Parent company Walmart insists it is addressing Asda’s performance “with urgency”
Asda has suffered its worst ever slump in quarterly like-for-likes as parent company Walmart insisted it was addressing performance “with urgency”.
In an eye-watering set of figures covering the second quarter of 2016, Asda said like-for-like sales nosedived 7.5%.
Footfall at the grocer’s stores dropped 6% in the three months to the end of June, while net sales fell 3%.
The drop, which marks Asda’s eighth consecutive quarter of tumbling like-for-like sales, comes off the back of a 5.7% slump during the first 13 weeks of 2016.
Walmart boss Doug McMillon insisted the US retail giant was “addressing this with urgency” but warned the turnaround would “take time”.
McMillon said: “In the UK, the competitive environment and food deflation continued to challenge the market, significantly impacting traffic and comp sales.
“Our strategy to turn things around is focused on improving the retail basics. We are simplifying and strengthening our offering through improved availability and assortment discipline, reducing costs and driving sales through strategic price investments.
“While our turnaround will take time, I’m confident in the new leadership team there and want to assure you we’re addressing this with urgency.”
Walmart parachuted Sean Clarke back to Asda from its Chinese business in July in a bid to spark a revival, replacing Andy Clarke at the helm.
Sean Clarke said: “Although Asda is in the midst of a very challenging period, there is no doubt in my mind that the culture that has always been at the heart of our success is still there.
”We’ve also started one of the biggest journeys of reinvention in our history to further build on our strong offer and I feel positive about the future.”
It is understood that new boss Clarke is a fan of bigger store formats and has placed a revamp of Asda’s largest supermarkets at the top of his to-do list as he attempts to rejuvenate ailing sales.
Clarke is also keen to sharpen prices, after Walmart’s international boss Dave Cheesewright admitted he was “very disappointed” with Asda’s performance and claimed the grocer would now “shift the balance from protecting profit to protecting share”.
Asda’s slice of the market has been eroded by the growth of discount duo Aldi and Lidl, as well as the ongoing recoveries of mainstream rivals Tesco, Sainsbury’s and Morrisons. The emergence of Amazon Fresh in the UK has piled further pressure on the business.
The grocery market is braced for an Asda backlash with a fresh wave of price investment anticipated from the supermarket giant before the end of the year, as Walmart prepares to flex its financial muscle.
But Asda is also focusing on cutting costs, investing in its private-label proposition and bringing “fresh talent” to the business as part of its 18-month Project Renewal plan.
Chief customer officer Andy Murray has already joined the grocer from Walmart, while deputy chief executive and chief operating officer Roger Burnley will officially start his new role in October, having been poached from big four rival Sainsbury’s.
Last month Asda revealed it had also raided Lidl after luring chief operating officer Chris Walker to become its new vice-president of supermarkets.