U.K. supermarket chain Asda saw a record decline in sales during the second quarter, illustrating the scale of the task facing new Chief Executive Officer Sean Clarke.
Same-store sales tumbled 7.5 percent, excluding gasoline, as the grocer continued to lose ground to discounters and its main competitors. The U.K. market continues to be characterized by “fierce competition and food deflation,” Brett Biggs, chief financial officer of U.S. parent company Wal-Mart Stores Inc., said in a statement Thursday.
Clarke, the former head of Wal-Mart’s China unit who replaced Andy Clarke as CEO last month, faces a tough task to revive the supermarket chain after eight successive quarters of declining same-store sales. Asda has committed to cut prices by 1.5 billion pounds ($2 billion) over five years as it seeks to cut the gap with discounters Aldi and Lidl.
“While our turnaround will take time, I’m confident in the new leadership team there and want to assure you we’re addressing this with urgency,” Wal-Mart CEO Doug McMillon said in the statement. “We are simplifying and strengthening our offering through improved availability and assortment discipline, reducing costs and driving sales through strategic price investments.”
Asda’s second-quarter performance was in contrast to its parent company. Wal-Mart increased its annual earnings forecast after second-quarter results topped estimates.
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