2016 profit and sales slump revealed by Asda

Profits and revenues at supermarket Asda slumped last year, in the worst year for Asda since it was taken over by Walmart.

In accounts filed at Companies House yesterday, Asda said that the grocery market as a whole has continued to experience low growth throughout the year, and competition in the sector has remained “intense”.

It said that delivering a low cost model and strengthening its core business. During 2016, opened eight new stores, including four superstores and four supermarkets, providing a total of 161,000 sq ft

Like-for-like sales in 2016 decreased 5.7% compared to the previous year, which was already 4.7% down on the year before.

Pre-tax profits declined by 19.9% to £657.2m. A dividend of £450m was paid during the year to owners Walmart despite the slump.

Asda has seen sales dwindle over the past three years, recording 11 consecutive quarters of decline. This has lead to the exit of chief executive Andy Clarke, who was replaced by Walmart international executive Sean Clarke last year.

The retailer has been rumoured to be in talks to takeover discount retailer B&M, following the news that its Big Four rivals were looking at expanding operations, with Sainsbury’s acquiring Argos and Nisa, and Tesco acquiring Bookers.

Chief executive Sean Clarke was optimistic at the last reported quarter, as sales dropped 2.8% – a massive improvement on the 5.7% fall in the first quarter last year, marking a potential turnaround for the business which has lagged behind rivals including Morrisons.