Asda suffers further sales decline but hails 'momentum' of turnaround bid

The embattled supermarket chain said like-for-likes slipped 2.8% in its first quarter to March 31.

The decline represented a marked improvement on the first quarter of 2016, when like-for-like sales slumped 5.7%.

Asda owner Walmart said the performance represented “sequential improvement” on the 2.9% decline it registered in the fourth quarter its last year, when taking into account the lack of a leap day this year and the later fall of Easter.

Shopper numbers slipped 2% during the period, while the average basket size dropped 0.8%.

Net sales advanced 0.9% as Walmart lauded the impact of “strategic investments in the customer value proposition.”

Operating income and gross profit both declined in the quarter, although Asda declined to break out figures.

‘Delivering more consistently’

Asda boss Sean Clarke, who was parachuted in from Walmart’s Chinese business last June in a bid to spark a revival, said: “We’re pleased that the momentum of Q4 has continued into the New Year with a third consecutive quarter of improvement.

“We’re delivering more consistently for our customers, particularly in fresh food, service and availability – both in stores and online.

“Participation in our award-winning Own Brand ranges has increased as we focus on increasing its value and quality and make sure we are offering the right ranges for our customers.”

However, Clarke added: “Despite this progress we are in no way complacent and there is still much for us to do.”

Recovery plan

Clarke has put the wheels of a recovery in motion since taking the reins from Andy Clarke last summer.

He launched two waves of price cuts last September to sharpen Asda’s value proposition and he has drafted in a clutch of senior staff to boost his leadership team, including former Lidl chief operating officer Chris Walker and ex-Co-op customer data director Andrew Mann.

Although Clarke is yet to lay out his strategy for the retailer in detail, Asda has put lowering prices and improving customer service, availability and the in-store experience at the heart of its turnaround plan.

The grocer stemmed the rate of sales decline to 2.9% in the quarter to January 27 as it hailed “early signs of improvement” under Clarke’s leadership.

According to the latest Kantar data, Asda grew sales 0.8% in the 12 weeks to April 23, ending a run of sales decay that had dated back to November 2014.

Walmart chief executive Doug McMillon said: “We’ve made some progress in the UK and the team is executing their plan.

“We are navigating our way back to a position of strength in that highly competitive market.”