First quarterly sales growth for Asda in three years

Walmart-owned supermarket Asda has reported its first quarterly sales rise in three years.

Sales excluding fuel rose 1.8% in the second quarter according to Walmart, compared to a 7.5% decline last year.

The Leeds-based grocer was helped by food price inflation and very weak comparative numbers last year.

Walmart said in relation to its UK business that: “Customers are responding to investments in the value proposition as we continue to see sequential improvement in the business.”

This comes following the news that Asda was in consultation with more than 3,250 staff at 18 underperforming stores, who risk losing their jobs or having working hours cut.

Phil Dorrell, partner at Retail Remedy said: “We are assured that Asda is attracting more shoppers and that sales are increasing compared to a weak period last year, but are we getting assurances of a real swing in fortunes?

“Sean Clarke’s focus has been on price, food quality and customer service, but this still feels like rearranging product on the shelf when the shop itself is in the wrong place.

“Recent announcements about cuts to staff working hours in under-performing Asda stores comes as no surprise. [But] there is a distinct risk that the cut in hours could result in a negative effect on customer service in these Asda stores. Yes costs are reduced but where is the sales growth coming from?”

Asda has also been associated with a takeover bid for discounters B&M, as it and its fellow Big Four struggle to keep up with the growth of European chains Lidl and Aldi.