Wednesday, 22 February 2017

Asda Has Suffered A Massive Sales Decline


Improving the quality of products and renovating stores has helped Asda stem its falling sales in the last quarter, the latest figures show.

The supermarket has suffered 10 consecutive quarters of decline after struggling to hold on to shoppers who have been lured by discount competitors Aldi and Lidl.

However, while sales were still falling at the end of the year, they fell at a lower rate than in previous quarters, down 2.9pc in the three months to December 31 compared to a 5.8pc drop in the previous quarter.

Chief executive Sean Clarke said he was “encouraged” by early signs that plans to get customers back through Asda’s doors were working, and that 140,000 customers had returned to the retailer in the last quarter.

“We are putting customers first and have sharpened our prices, improved our ranges and availability, all with friendly service,” he said. Asda has been improving the quality of its products and has overhauled many of its stores, changing its shelving layouts and refreshing the interiors.

Some market commentators had expected Mr Clarke, who took over from former chief executive Andy Clarke in July last year, to slash prices to drive gross profit sales, but he has focused more on targeted price reductions and overhauling the customer’s experience of shopping in Asda.

In December, for example, it announced that it would lower the costs of Christmas vegetables in order to go head-to-head with the discounters on a limited number of fresh products.

Clive Black, an analyst at Shore Capital, said it was “hardly surprising” that Asda had taken this route. “Irrational pricing activity would merely have transferred too much benefit from shareholders and the broader food system to customers on a highly unfocused basis,” he said.

However, Asda senior executive have admitted there is more to do to turn the supermarket around.

Brett Biggs, Walmart’s chief financial officer, said: “We have a lot of work to do in this market, but we’re encouraged by some early signs of traction with improvements in the customer value proposition.”



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