The chain, which is owned by Wal-Mart of the USA and has an 18 per cent market share in Scotland, yesterday revealed like-for-like sales fell 5.8 per cent in the fourth quarter of 2015, including Christmas.
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Like-for-like sales fell 5.8% in the 13 weeks to 1 January, an acceleration on the 4.5% decline in the third quarter and dragging full-year LFL sales down 4.7%.
Fierce competition is continuing among the UK’s major retailers, with the biggest four supermarkets fighting for market share as discounters Lidl and Aldi take a bigger cut of United Kingdom retailing.
CEO Andy Clarke admitted 2015 had been a hard year, with the United Kingdom retail market still undergoing “significant and permanent structural change”.
However, its strategy of protecting profit margins rather than chasing unprofitable sales kept profitability stable in the quarter and the company said it expects that to remain the case for 2016.
Some analysts still opine that Asda’s fall in sales was not only because of higher prices.
Parent company Walmart also reported falling profits.
Sainsbury’s posted a 0.4 like-for-like sales fall in the 15 weeks to January 9, although this was for a longer period.
He added: ‘We are a business that is in financial control not a business in crisis’.
“We think the consumer is looking for a broader appeal than one day’s excitement”, Clarke added.
Analysts said this was much worse than expected.
Clarke’s strategy includes an extra £500million “price investment” to keep more products at “everyday low prices” in addition to the £1bn already announced as part of a five-year plan. “That has been Asda’s successful proposition over the last fifty years and that’s what will deliver sustainable growth in the long term”.
Clarke, who last month confirmed staff consultations were beginning ahead of what could be hundreds of job cuts, said a new price investment campaign called “Pocket More” had launched this week, to cut Asda’s prices below Tesco, Sainsbury’s and Morrisons on a further 1,600 lines.
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But he said Asda was sticking to its targets of being 10 per cent cheaper than its big three rivals and only 5 per cent more expensive than the discounters.
