UK grocer Asda reported a further deterioration in sales as the industry undergoes a period of “unprecedented” change.
Same-store sales fell 4.7 per cent in the 11 weeks ended 30 June, the Leeds, England-based company said Tuesday. That compared with a 3.9 per cent decline in the first quarter, which was the worst performance ever reported by the company.
More than 12 months into a five-year plan to cut prices by £1 billion ($1.6 billion), Asda has been unable to stem a decline in sales that’s being fueled by the growth of the discounters. Market-share gains by German chains Aldi and Lidl have caused larger rivals to fight back with price cuts. "We remain firmly committed to narrowing the price gap to the discounters,” Chief Executive Officer Andy Clarke said at a press conference. Asda has reached its nadir and the third quarter has seen “some green shoots,” Clarke said.
The CEO brushed aside speculation over his own future, saying he will be staying with the business.
Separately, Asda's parent company Wal-Mart reported second-quarter earnings that missed analysts’ estimates after currency fluctuations and spending on employee raises dragged down profit.
News by Bloomberg, edited by ESM
