Asda turnaround kickstarts as sales decline slows

Walmart is encouraged by “early signs of improvement” at Asda as it gears up its recovery, but sales remain under pressure said the US giant as it announces its tenth consecutive quarterly sales drop.

Net sales for Q4 have fallen 0.6% at Asda, according to its parent company Walmart, an improvement on the third quarter when sales fell 7.5%.

Along with Walmart’s Brazilian and Chinese businesses, Asda has shown decreases in gross profit margins and operating income.

Walmart, which has different accounting periods to its UK subsidiary, said that it had seen signs of improvement in its customer value proposition and that it would continue to make strategic investments in service and price.

In a statement from Doug McMillon, president and CEO, and CFO Brett Biggs, Walmart said it was addressing the problems at Asda “with urgency”.

After sales fell by more than £100m over the Christmas period as data from analysts Kantar Worldpanel in January showed Asda took £4.32bn in the period – down 2.4% on a year earlier. This was the worst performance from any of the large chains.

Sales had dropped for the seventh consecutive quarter at its last results in May and market share has continued to decline.

Chief executive Sean Clarke was appointed in June and it had been hoped that he would begin a turnaround of the struggling supermarket.

Total sales at Walmart reached $130.9m, a 1% increase.