Asda continues to struggle against the discounters, suffering another big drop in sales.
Sales excluding fuel at stores open for more than a year fell 5.8 per cent in the three months to 30 September, with net sales dropping by 3.8 per cent.
This was a slight improvement on the retailer’s 7.5 per cent fall in the second quarter of 2016 – its worst ever quarterly result – but it will be cause for concern for Asda’s new chief executive Sean Clarke, who took over in July.
In a statement, Clarke focused on the positives, saying: “We have lowered thousands of prices, improved hundreds of own brand products and invested in more hours for colleagues on the shop floor - so it’s encouraging to see more customers shopping with us in stores and online.
He added: “It is equally encouraging to see our commitments to quality and price recognised by the wider industry. Our own label products have won record numbers of awards, including the Quality Food and Drink Awards’ ‘Retailer of the Year’, while Which? found Asda to have the lowest prices on brands for the seventh month in a row.”
Despite this positivity, Asda faces an uphill battle to re-establish itself in the UK’s fiercely competitive retail market. The Walmart-owned supermarket chain is struggling to compete with German discounters Aldi and Lidl on price, as the discounters continue to expand and open dozens of new stores.
Patrick O'Brien, an analyst at Verdict Retail, told BBC News: 'The others [in the Big Four] never traded on being the cheapest, but Asda did, and now it isn't, so unless Walmart wants to use its financial muscle to take the price war to a new level, it must demonstrate new reasons for shoppers to go there.”
Walmart chief financial officer Brett Biggs added: “The key priority remains driving an improved customer experience and building sales momentum by simplifying the offer, improving product availability and making strategic investments in service and price.“
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