- Asda suffers 4.5% fall in third-quarter like-for-likes
- Represents a marginal sales improvement from the grocer’s second quarter “nadir”
- Boss Clarke insists Asda has “financial strength and clear plan” to recover
- But he warns it will be a “slow and costly process”
Asda has reported a 4.5% slump in like-for-likes during its third quarter but boss Andy Clarke insists it has the right plan to recover sales.
The grocer’s latest sales fall, for the 13 weeks to September 30, comes off the back of a 4.7% drop in sales during its second quarter.
Clarke dubbed that Asda’s “nadir” and claimed the supermarket giant had seen “green shoots of recovery” going into its third quarter.
But that has failed to manifest itself in any material like-for-like sales gains, as Clarke said volumes remain “under pressure from price deflation and the intensely competitive background” in the grocery sector.
He added that Project Renewal, the 18-month programme Asda launched last month, will return the grocer to “long-term, sustainable volume growth.”
The strategy saw Asda shelve plans to roll out its click-and-collect portfolio to 1,000 sites, instead focusing on revamping 95 of its existing supermarkets.
Asda is also reviewing its ranges to deliver a 10% reduction in ranges and “remove duplication”.
Clarke said these were “logical and necessary” changes to ”better address the immediate challenges and permanent changes the market is facing.”
“We have the financial strength and clear plan to sustain us through this period, while we take appropriate action to strengthen our competitive position”
Andy Clarke, Asda
But he warned it would be a “slow and costly process” to transform the Walmart-owned retailer.
Clarke added: “There’s no doubt this represents another challenging quarter. Sales volumes remain under pressure from price deflation and the intensely competitive background remains throughout the food sector.
“Having said that, we have the financial strength and clear plan to sustain us through this period, while we take appropriate and considered action to further strengthen our competitive position.
“Last month I launched Project Renewal, an 18-month programme designed to work parts of my five year strategy harder to return us to long term, sustainable volume growth.
“Increasing our focus on the core business means strengthening some areas while pausing activity in others, which will allow us to sharpen our customer offer and continue to improve operational efficiency.
“I’m confident that by reinforcing our offer we can further extend our price advantage over major competitors and close the gap against the limited assortment discounters – not only on price, but across range, service and quality.”