Asda’s quarterly sales fall again

Leeds-based Asda has released its latest results
Leeds-based Asda has released its latest results
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Supermarket Asda has posted another hefty fall in sales, but said trading had improved as price cuts and turnaround efforts start to pay off.

The chain - owned by US giant Walmart - reported a 5.8 per cent fall in like-for-likes sales, excluding petrol, in its third quarter to September 30.

This comes against a dire previous three months, when the group reported a 7.5 per cent sales plunge in its worst quarterly performance on record.

New boss Sean Clarke, who took up the reins on July 11 after being parachuted in to replace previous boss Andy Clarke, has slashed the prices of everyday items as he attempts to arrest falling sales at the group.

He said: “We have lowered thousands of prices, improved hundreds of own-brand products and invested in more hours for colleagues on the shop floor - so it’s encouraging to see more customers shopping with us in stores and online.”

Asda announced in September that it was lowering thousands of prices on everyday favourites by an average of 15 per cent, with items such as beef, chicken and sausages all becoming cheaper.

The move, part of a new value campaign dubbed That’s Better, has also seen Asda improve the quality of its own-brand ranges.

The turnaround comes as Asda fights back having lost out recently in a brutal price war across the sector.

Walmart chief financial officer Brett Biggs said: “The key priority remains driving an improved customer experience and building sales momentum by simplifying the offer, improving product availability and making strategic investments in service and price.”

Asda, Tesco, Morrisons and Sainsbury’s are attempting to fend off the challenge from German discounters Aldi and Lidl, which have taken market share from the so-called Big Four.

Trading woes have been compounded recently by the plunge in the value of the pound since the Brexit vote, which is putting pressure on suppliers to raise prices to cover increasing costs.

Tesco recently engaged in a high-profile spat after Unilever demanded an across-the-board price hike - reportedly up to 10 per cent - for popular brands such as Marmite.

It halted deliveries to Tesco until the stand-off was resolved.

Recent supermarket share figures confirmed Asda making strides in its recovery.

Kantar Worldpanel said Asda’s sales dropped 5.2 per cent in the latest quarter - the slowest decline for four months.

Sales of its premium own-label range increased 8 per cent, according to Kantar, although its market share declined by one percentage point to 15.6 per cent.

But it is being outpaced by Big Four rivals, with Tesco increasing its market share for the first time in five years after Kantar said its sales rose by 1.3 per cent.

Morrisons also recently saw like-for-like sales growth in the third quarter - up 1.6 per cent thanks to a boost from Halloween.

Phil Dorrell, a partner at Retail Remedy retail consultants, said that Asda will be praying for a “Christmas Made Better”.

Mr Dorrell added: “Sales performance behind competitors and slumping market share are no way to head into the golden Christmas quarter.”

However, he said the firm’s decision to steer clear of “Black Friday” was the right decision, because it brought the focus on to good value through every-day prices, which suited Asda’s demographic.