Asda hits out at rivals as sales slide

ASDA has launched an attack on its rivals after it reported a 1.6% slump in like-for-like sales in its third quarter.

The Yorkshire supermarket said the increasing use of vouchers and promotions by rivals were cheap gimmicks that misled shoppers and while a 1.6% drop is a significant fall from the growth of 0.5% in the second quarter ,it said that in a ‘distressed’ market for all major retailers, Asda is outperforming its traditional competitors and gaining market share.

Asda CEO and president Andy Clarke said: “The last quarter has seen a shockwave go through our industry and others are starting to respond to the challenges they face. I expect that we will see another tough quarter and I’m under no illusions that the battle continues to rage.

“A new reality is upon us and although we were the first to adapt, we need to do everything to remain ahead of our traditional competitors whilst removing reasons for customers to go to the small discount shops. That’s the strategy we are on and we need to keep accelerating it.

“We won’t be knee jerked into reacting to short term tactics. Vouchers can win quarters, but strategies win decades.”

Latest like-for-like quarterly sales figures showed continuing declines for the others in the big four – Tesco down 5.4%, Sainsbury’s dropped 2.8% and Morrisons slumped 6.3%.

In a briefing on Thursday, Clarke said Asda took early action to address the changes within the retail market 12 months ago – implementing a five year strategy to Redefine Value Retailing – that focusses around delivering a market leading value proposition, driving efficiency within the business operation, as well as leading online and delivering physical formats for the future.

“A year ago we took clear action to address the changes in our market and implement a five year strategy to redefine value retailing,” Clarke said.  “That is a long-term strategy that won’t be delivered overnight, but our early, decisive action has seen our business outperform our traditional competitors in a market that is in unprecedented distress.

“We have a clear understanding of the challenge we face as a business.  When I launched our strategy a year ago I said that the market was beginning to polarise between the premium retailers and the discounters – and the traditional players would be squeezed.  Asda has begun to step away from the ‘Big Four’ and outperform its traditional competitors. We have more to do on the discounters – but we continue to close the gap on price and offer ten times the range across stores and online.”