Asda stems sales decay with first rise in three years

The supermarket giant said like-for-like sales climbed 1.8% in the 13 weeks to July 28, in contrast to a 7.5% nosedive in the comparable period last year.

It marked Asda’s first period of growth since the second quarter of 2014, ending a run of sales decay stretching back 11 consecutive quarters.

Although Asda hailed one of its most successful ever Easter trading periods, when sales rose 16%, it said like-for-like sales were still up 0.7% without the Easter impact.

Shopper numbers edged up 0.6% during the period, while the average basket size increased 1.2%. 

Asda’s owner Walmart did not provide a profit figure, but said the supermarket chain’s operating profit declined during the quarter as a result of continued investment in price. 

Walmart insisted British shoppers are “responding to investments in the value proposition” and hailed “sequential improvement” in its UK business.

Asda president and chief executive Sean Clarke, said: “Our continued focus on delivering great value and service meant 275,000 new customers chose to shop at Asda in Q2, particularly during Easter, which saw us return to positive comparative growth.

“Recognition should go to our store colleagues for the progress made from 2016, but we know we need to continue to up our game to be in the best shape possible.

“We will continue to work collaboratively with our suppliers to create the best products, make investments where they matter most to our customers, and ensure that we are fit for purpose in what remains a competitive market.”

Walmart boss Doug McMillon said he was “encouraged” by Asda’s performance during the quarter.

He added: “Customers are responding to investments in price and store experience by visiting the stores more often and increasing their basket sizes.

“There’s still much more to be done, but we’re clearly headed in the right direction”

Earlier this month, Asda said pre-tax profit slumped 18.8% to £791.7m – its worst full-year performance since being acquired by Walmart.

Just a week after those results were filed at Companies House, Asda revealed it was slashing store staffing levels in 18 underperforming supermarkets.

The grocer placed 3,257 shopfloor workers into consultation and said the number of redundancies was likely to be in the hundreds.

It is also in less formal discussions with employees at 59 more supermarkets, although it is understood Asda is not seeking to cut jobs in those stores.

The changes form part of Sean Clarke’s plans to rejuvenate the retailer’s fortunes.

Clarke was parachuted in from Walmart’s Chinese business last June as the US retail titan ramped up efforts to arrest its run of declining sales.

Asda has suffered amid the ongoing onslaught of the discounters, consumers switching to online and increasing cost headwinds including the national living wage and rising sourcing costs following the fall in the value of the pound.

Clarke has ploughed investment into cutting prices, driving up product quality and improving customer service after falling behind its main rivals.