Asda issues its quarterly update this week, with pressure on CEO Andy Clarke after performance had reached a “nadir” last year.

After a week that brought management restructuring at Marks & Spencer as it bids to win back ground in fashion, attention turns to another retailer also seeking to recover trade from core shoppers: Asda.

The Walmart-owned grocer issues a quarterly update on Thursday. Although chief executive Andy Clarke originally thought performance had reached a “nadir” last year, that has proved not to be the case.

The latest Kantar market share data, covering the 12 weeks to April 24, showed that Asda spoke for 16% of the market, compared to 16.9% in the comparable period of the previous year. Its sales tailspinned 5.1%.

Torrid environment

So the pressure is on Clarke, who has successfully protected Asda’s bottom line, to get the top line moving as soon as possible in a food retail environment that remains torrid.

Kantar Worldpanel head of retail and consumer insight Fraser McKevitt said of the most recent food retail data: “Consumers are enjoying a golden period of cheaper groceries with like-for-like prices falling every month since September 2014.

“Nearly two years of falling prices mean the average household is spending £78.10 a week in the supermarket, so consumers have annually saved more than £400 [more than they would have] if prices had risen at the same rate as the last decade.”

Feast or famine?

He put his finger on the problem: feast for consumers is famine for retailers.

Asda must be feeling particularly hungry as the discounters continue to put on sales and big-four rivals Morrisons, Sainsbury’s and Tesco all show signs of progress, although caveated with caution.

At the same time some smaller food retailers, notably the Co-op, have shown signs of momentum.

So what will Asda do? The retailer, once the undisputed champ when it came to price, has the clout if necessary to turn up the volume on price in order to reconnect with core shoppers.

However what the disruption of the past several years has shown is that price, absolutely central as it may be, may not on its own be a silver bullet.

Low prices drew consumers through the doors of Aldi and Lidl in droves. Once inside, they also found quality that pleasantly surprised them.

Asda was once seen as the consumer’s friend, campaigning on their behalf for great value and annoying upscale brands by selling their premium products to the masses at bargain-basement prices.

If the retailer could rediscover that spirit and sense of mission, sales might begin to pick up once again.