Asda’s sales crisis enters seventh quarter

ASDA’S sales have fallen for the seventh-consecutive quarter as the Leeds-based retailer continues to struggle to stem haemorrhaging sales.

Figures released by its American owner Walmart has shown Asda’s like-for-like sales were down 5.7% for the first quarter, excluding fuel.

Walmart pointed to “significant, structural shifts in the market driven by growth in hard discounters and intense price competition, [which has] led to continued deflation in food that has now lasted for 20 consecutive months”.

It also said that its efforts to improve price and product availability were “not enough to overcome traffic and food volume declines” in its large stores. Asda chief executive Andy Clarke, said: “Sales volume for the period reflect the impact of deflationary prices and competitive market conditions. The implementation of Project Renewal continues, including the roll out of a comprehensive programme to re-lay and update our stores to improve the customer experience, reduce complexity and streamline ranges.

“A new approach to marketing, including our partnership with James Martin, will show customers a new Asda face which showcases the values on which we have built the business over the years and reinforces our everyday low price value proposition. Independent surveys show that we have again narrowed the price gap with the limited range discounters and are significantly cheaper than our major competitors.”

Last year Asda’s sales fell by nearly £1bn, with its worst quarter being the final 13 weeks of the year when sales were down 5.8% over the crucial Christmas period.

This month’s figures from analysts Kantar put Asda’s market share down to its lowest point for a decade at 16% – having been at 17.5% two years earlier – which has slipped steadily under pressure from Aldi and Lidl and improved performances from Morrisons and Tesco.

It announced the sale of its photo division to Photo-Me at the end of April as it looks to concentrate on its core operations.

The move forms part of Project Renewal, an 18-month programme launched last autumn to address the falling sales. It slowed down its expansion into click-and-collect to focus on its supermarkets and low-price offer.

More to follow.