Asda like-for-like sales fell 0.4% in its second quarter to July 31 and total sales grew in the low single digits.

The fall comes as Asda’s market share fell slightly in Kantar Worldpanel’s figures for the 12 weeks to July 11.

Walmart International chief executive Doug McMillon said Asda “continues to make good progress towards their strategic goals”.

McMillon said Asda’s gross margin as a percentage of sales increased in the second quarter on a mix shift towards higher margin George and general merchandise.

He said: “George had a particularly strong quarter, with strong sales of World Cup related merchandise and our 100 day quality guarantee. Customers continue to respond well to our guarantee, and we continue to see this as a unique competitive advantage in the market.”

Asda has suffered since the beginning of the year when former boss Andy Bond admitted that the retailer had become too promotional. It since launched its Price Guarantee promising shoppers it will be the cheapest grocer, or it will refund the difference. It also took the decision to focus on every day low prices rather than promotions. Earlier this year it reported its first negative like-for-like sales for five years.

Asda’s second dedicated home shopping centre will open next week in Enfield and McMillon said it will “provide enhanced coverage in an area of low market share for Asda”.

He added:  “Asda’s customers are facing recently announced tax increases and cuts in government spending.  These are likely to cause our UK customers to face a challenging 12 to 18 months.  Recent price reductions on high volume staples such as milk and eggs and theguaranteed lowest basket price shows Asda’s commitment to provide the value our customers expect and trust us to deliver.”

Walmart’s international division accounts for 25% of its total sales, and Asda accounts for 31% of those international sales.

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