Asda’s troubles continue after worst-ever quarterly sales drop

ASDA has suffered its worst-ever quarterly sales fall as it continues to struggle in the face of price pressures and customer loyalty.

Sales fell 5.8% in the fourth quarter, to January 1, giving it a full-year performance of -4.7%.

Andy Clarke, President and CEO of Asda said: “2015 was a difficult year. The UK retail market is continuing to undergo significant and permanent structural change, competition in our sector has been fierce and our market share has come under pressure.

“In that context, our results for the year have been commendably stable, balancing investment in our customers with disciplined financial management in a period when many of our competitors have suffered severe falls in profitability.

“We have steered a careful course through this very turbulent period for the industry and through a complex set of challenge”

It is the sixth-consecutive quarterly sales fall for Asda, which has been under pressure from the sustained growth of hard discounters Aldi and Lidl and the improving fortunes of Morrisons and Tesco since new chief executives took over.

Like its rivals, it is also trying to adapt its business model to the changing nature of shoppers’ behaviour.

Asda’s chief executive Andy Clarke has increased the pace of change since launching Project Renewal in October . It prioritised its core business, announcing plans to scale back its click-and-collect strategy and refurbish about 95 of its largest stores.

The new strategy was a response to falling sales, with analysis by Kantar showing Asda’s market share fell to its lowest level since 2006 .

Asda changed its approach to Christmas – launching its Christmas advert on October 31 and avoiding Black Friday , despite being one of the early adopters of the American shopping event.

However Christmas trading was disappointing, and was followed by the announcement of job cuts at its Leeds head office , with up to 10% of the 3,000-strong workforce under threat.

Changes have also been made among the senior management team. Andy Murray has moved from Walmart this week and replaced Barry Williams as chief customer officer while Roger Burnley will start as chief operating officer in October once he is free from his restrictions since leaving Sainsbury’s.