UK retailer Asda has posted a sales decline of 2.9% for the fourth quarter of the year, according to results posted by parent company Walmart International.
Shopper numbers fell by 1.8% for the period ending 27 January, while basket size was down 1.1%. Net sales were down 0.6%, with the retailer also seeing decreases in gross profit rate and operating income.
In a statement, Walmart International said that, in the UK, sales remained 'under pressure […] however, we are encouraged by early signs of improvement in the customer value proposition'.
A cost-analytics programme implemented by Asda 'continued to be successful, delivering savings above expectations for the year', while managed inventory levels 'declined at a faster rate than sales in the quarter'.
Looking ahead, Asda will continue to 'simplify the offer, improve product availability, and make strategic investments in service and price' as it seeks to mount a turnaround in its fortunes.
Commenting on its performance, Catherine Shuttleworth of shopper and retail marketing agency Savvy said that this marked a "double hit" for Asda, with "fewer customers spending less money. It is still in decline, which is a grave concern for a business that relies on volume to drive its EDLP strategy.
"There’s simply nowhere to hide with a resurgent Tesco, a rapidly improving Morrisons in their heartlands and the discounters, with their ambitious expansion plans, hot on their heels and no sign of a slowdown."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
