Asda struggles despite growth in supermarket sales
DESPITE continued deflation, supermarket sales increased, though only some of the Big Four are capitalising on this growth according to Kantar Worldpanel.
An increase in grocery sales of 0.3% is benefiting Morrisons, but Asda is still struggling with consumer spend down 5.4% for the 12 weeks to 11 September 2016. market share was at 15.7%.
This comes after disastrous results for the Leeds-based grocery chain which showed seven consecutive quarters of sales decline, leading to the departure of chief executive Andy Clarke and parent company Walmart’s assurances that a turnaround would get underway.
Morrisons’ market share fell by 0.3 percentage points to 10.4%, but this is unlikely to dampen the spirits of the supermarket chain following stronger results in its trading update for the first half of 2016.
The fall is down to a reduced store portfolio, which it is making up for in the online sector, with shopper numbers up by 45% on last year.
Morrisons announced that it was back in profit in the first half of the year for the first time in four years earlier this month.
Underlying profit before tax was up 34.2% from the first half of the 2015/16 year, to £157m, and like-for-like sales (excluding fuel) were up 2.0%.
Revenues dipped slightly, down 0.4% to £8.03bn from £8.06bn last year, and chief executive David Potts said he was “pleased” with the progress of turnaround plans.
Analysts said its “back to basics” approach was helping the Bradford-based supermarket turn it around, after it signed a deal with Amazon, renegotiated its expensive Ocado deal and cut the prices of more than 4,000 products in store.
Lidl reached a market share high of 4.6% this period having grown by 9.5%, while Aldi increased sales by 11.6%.
