Asda boss Andy Clarke has insisted the supermarket is bouncing back after reaching “a nadir” as he revealed the chain’s worst quarterly sales figures.
The retailer blamed a competitive grocery market, in which rivals have been slashing prices and offering discount vouchers, for a 4.7% fall in sales at established stores in the three months to 30 June.
The performance cements Asda’s position as the worst performer of the UK’s big four grocers, which have all recorded falling sales amid the slide in the cost of food commodities and a price war led by the rising popularity of discounters such as Aldi and Lidl. Last month, Asda lost its position as the UK’s second-biggest supermarket to Sainsbury’s.
Clarke said: “The market is in exceptionally challenging times ... We have certainly hit our nadir. Every business has got to have one and this is ours. We are on an upward trend and we have got positive green shoots [in the coming quarter].”
The chief executive, the longest-serving boss of the major UK grocers, said Asda had the right strategy, despite a slip in performance from the previous quarter. In May, Asda revealed a 3.9% fall in sales at its established stores for the 15 weeks to 19 April – the Walmart-owned chain’s worst sales figures since the 1990s.
Clarke said Walmart was right behind him and any rumours that he was under pressure to leave were wrong. “Let’s silence that one. I’m here presenting today’s results and I’m here to stay,” he said. “[The strategy] is working and we are wholly committted as our parents are to seeing it through no matter what the short term disruption might be around us.”
Asda has been one of the biggest losers amid a nascent recovery at Tesco, which has been cutting prices and putting thousands more staff back into stores in an attempt to improve service.
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.
The supermarket is belatedly trying to get a foot in that game by moving into petrol forecourt stores. It is in the process of converting 15 petrol stations it bought last year. Clarke said in May that Asda expected to have 100 such outlets within the next five years.
Asda is also trying to boost online sales by offering shoppers the option of picking up groceries ordered online at drive-through kiosks or lockers.
This article was written by Sarah Butler, for theguardian.com on Tuesday 18th August 2015 14.33 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010