Asda sales drop as Walmart blames Brexit effect

The supermarket giant reported a 0.5% downturn in like-for-like sales, excluding petrol, for the period from July 1 to September 30, 219.

Chief executive of parent company Walmart, Doug McMillon, blamed the decline in like-for-like sales on Brexit, which he said continues to “negatively affect customer spending patterns”.

He pointed out that sales declined by 50 basis points during the quarter “but improved sequentially compared with the Easter-adjusted comparison from the second quarter”.

McMillon hailed the growth of Asda’s online grocery sales, which he said grew at “roughly two-times the growth of the overall market”.

In terms of its international business, Walmart reported sales of $29.2bn, an increase of 1.3%. Excluding currency, net sales were $30.2bn, a 4.8% increase. Walmart said the inclusion of Flipkart and strength in Walmex and China were “partially offset by softness in the UK”. 

Prior to its first-quarter update in April, Asda had posted seven consecutive quarters of growth under the stewardship of chief executive Roger Burnley and his predecessor Sean Clark, before a 1.1% drop in like for likes bought that run to an end.

Burnley said the quarter had given the grocer and its customers “little respite” but he insisted the supermarket was working hard to keep prices low and improve the in-store experience.

He said: “This quarter has afforded consumers little respite from political or economic uncertainty and this has shown in their spending. However, we have remained focused on doing the right things for our customers. We continue to work hard to keep prices low for our customers as well as driving quality and improving our shopping experience.

“Our core online business has continued to outpace the market, achieving double-digit growth and customers responding well to developments to the service including our award-winning ‘shop by recipe’ feature. We have also invested in improving 15 stores this quarter, which has resulted in an improved overall customer experience.”

Burnley also said he was “confident” Asda was “ready and raring to go” as it enters the busiest trading period of the year.

“I am absolutely committed to securing the future of our business for the benefit of our colleagues, our customers and our communities – whatever external challenges we may face. As we enter the busiest trading period of the year, I am confident that we are ready and raring to go and I would like to take this opportunity to say thank you to every one of our colleagues, who I know will pull out all the stops to make this Christmas extra special for our customers.

“While the retail sector continues to face challenges as a whole, I know that Asda is built on strong foundations and is at its best when we are able to work as one team, delivering for our customers,” he added.

Asda has recently been engaged in a row with the GMB union over proposed changes to staff contracts.

Following a protracted public battle, more than 200 Asda staff lost their jobs after refusing to sign the new contracts after a grace period expired on Sunday.