Asda, which trails UK market leader Tesco by annual revenue and is battling with Sainsbury’s to be Britain’s No. 2 grocer, said sales at stores open over a year fell 4.7 percent in the 11 weeks to June 30, its fiscal second quarter.
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The 4.7 per cent decline follows a 3.9 per cent fall in the first quarter but Clarke insisted his plan was on track.
“We remain firmly committed to narrowing the price gap to the discounters”, Chief Executive Officer Andy Clarke said at a press conference.
“We have got positive green shoots as we move into the third quarter”.
He stressed that all supermarkets will have to work on the assumption that discount traders will double their market share. They have also been hurt by record commodity-led deflation.
And today Sainsbury’s added to Clarke’s woes in the supermarket price war, after it announced it was extending its Asda Brand Match offer to online shoppers.
And analysts say Asda has reduced prices without getting the boost to volume it was looking for, partly reflecting a difficulty in attracting new customers, especially more upmarket ones.
Asda has also suffered because it does not operate local convenience stores, which are achieving stronger sales growth than out-of-town supermarkets because of changes in shopping habits.
“Behind the negative sales number lies a more positive story for Asda”, he said. “Even if it’s not as fast as we would like”.
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The results come as parent company Wal-Mart on Tuesday cut its earnings guidance for the year and gave a soft outlook for the current quarter as wage increases and investments in its struggling U.S. business pressured profit at the world’s largest retailer.
