Worst-ever quarterly sales drop for Asda

THE scale of the sales crisis facing Asda’s new chief executive Sean Clarke has been put into sharp focus after the supermarket announced its worst-ever quarterly sales fall.

Figures released by its American owner Walmart has shown Asda’s like-for-like sales were down 7.5% for the second quarter, excluding fuel – significantly down on the first quarter drop of 5.7% that preceded Andy Clarke’s departure as Asda boss.

Asda has suffered eight consecutive quarters of falling sales.

Asda President and CEO, Sean Clarke said: “After 13 years I returned to Asda last month and it’s great to be back. I’m enjoying getting to know our colleagues again and getting under the skin of the business.

“Although Asda is in midst of a very challenging period there is no doubt in my mind that the culture that has always been at the heart of our success is still there. We’ve also started one of the biggest journeys of reinvention in our history to further build on our strong offer and I feel positive about the future.

“Asda is a great retailer that has been built on the promise of delivering our customers real value through price, range, availability and friendly service. I have always had great faith in that promise and intend to keep it.”

Walmart’s president Doug McMilon said: “While our turn-around will take time, I’m confident in the new leadership team there and want to assure you we’re addressing this with urgency.”

Sean Clarke arrived from Walmart China last month to take over at the Leeds-based group. He is forging ahead with the delivery of ‘Project Renewal’ which is focusing on retail basics.

But retail analyst Paul Thomas of Retail Remedy believes Asda the dreadful sales demand urgent action.

He said: “It is too soon for the new chief executive to have had any significant impact but a 7.5% decline in like for like sales is apocalyptic for Asda.

“There is absolutely no honeymoon period for Sean Clarke: it’s a case of get in there and power up the defibrillator.”

Walmart has blamed “significant, structural shifts” in the market, including competition from “hard discounters” such as Aldi and Lidl for its continued problems.


Mr McMilon added: “In the UK, the competitive environment and food deflation continued to challenge the market, significantly impacting traffic and comp sales.

“Our strategy to turn things around is focused on improving the retail basics.  We are simplifying and strengthening our offering through improved availability and assortment discipline, reducing costs and driving sales through strategic price investments.”

Brett Biggs, Wal-Mart’s chief financial officer, highlighted the “aggressive cost reduction program” it has introduced in its Asda stores, as well as the expectation that Sean Clarke’s arrival will drive improved performance.

He said the company would drive sales “through strategic price investments” and are commited to a five-year £1.5bn price investment.

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