Asda, which replaced its chief executive last month, said sales at stores open over a year, excluding fuel, crashed 7.5 percent in the three months to June 30, its fiscal second quarter.
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Walmart, the US-based owner of Asda supermarkets, said its own net profit for the three months to the end of July rose 8.6% to $3.77bn (£2.87bn).
Struggling supermarket Asda has laid bare the challenge awaiting new boss Sean Clarke after reporting its worst quarterly performance on record.
Despite today’s woeful numbers, parent Walmart’s CEO Doug McMillon claims the Asda brand is on the right track.
Walmart plans to implement a series of steps to reverse the fortunes of Asda, including a focus on improving the retail basics, simplifying assortment and driving even deeper price cuts.
Wal-Mart said its United Kingdom management remains focused on improving retail basics through delivery of ‘project renewal, ‘ part of the company’s plan to turn the business around.
The “big four” supermarkets in the United Kingdom have come under increasing pressure from the expansion and popularity of German discount rivals Aldi and Lidl which are continuing to increase their market share.
“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”, he said.
Walmart boss Doug McMillon said: ‘In the United Kingdom the competitive environment and food deflation continued to challenge the market, significantly impacting traffic and comp (arable) sales. Most recently he ran Walmart China.
Despite Asda’s poor performance, the world’s biggest retailer still reported a higher-than-expected quarterly profit thanks to strong sales at its United States stores.
Paul Thomas, senior consultant at Retail Remedy, described the sales fall at Asda as “apocalyptic”. In reality, Walmart’s grocery store competitors in the United Kingdom such as Tesco, Wm Morrison Supermarkets and Sainsbury have simply gotten better at offering deal-seeking Brits good discounts on apparel and food.
‘It is too soon for the new CEO to have had any significant impact but a 7.5 per cent decline in like for like sales is apocalyptic for Asda’.
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“Asda’s USP was that it was the cheapest grocer in the UK”.
