Asda sales plummet as supermarket wars continue
ASDA has seen its like-for-like sales drop 3.9% in its first quarter as it continues to be affected by the competition from discounters and deflation.
The Leeds-based supermarket group has now suffered sales falls in three consecutive quarters, but the pace is increasing. In 2014, like-for-like sales dropped 1%.
“This last quarter has been unprecedented,” said Asda’s chief executive Andy Clarke. “We have seen deflation in the market and exponential shifts in the industry. Although I still believe that 18 months ago we did a great job of predicting changes, we could not have foreseen what’s happened to others and the moves they have had to make in order to restore their business – creating an impact on us in the short-term.
“Whilst I take no pride in reporting a negative number, we are in a period of expected turbulence, not distress. We won’t buy short term sales at the expense of long term profitability. Throughout this period of change in our sector, Asda has been first to market with its response.
“Fundamentally, Asda remains a balanced, healthy sustainable business with a clear direction allowing us to hold our nerve and remain focussed on delivering for our customers.”
In February, Asda announced a £600m store investment programme which would fund 17 store openings this year and the remodelling of a further 62 stores.
Asda’s American owner Wal-Mart saw its international sales suffer in the three months to April 30, down 6.6% to $30.3bn (£19.5bn), which all-but wiped out the sales increase at its US stores.
