Asda set to reveal trading figures for festive period

Figures from its UK rivals have already revealed how tough the festive period was for the “big four” supermarkets, with the chains resorting to aggressive discounting to lure in cost-conscious shoppers as they faced increasing competition from the likes of Aldi and Lidl.

Market leader Tesco blamed a weak market for its 2.4 per cent drop in UK like-for-like sales over the six weeks to January 4, while a 5.6 per cent decline in sales over the festive period for Morrisons led the Bradford-based chain to warn over profits.

Even resurgent player Sainsbury’s posted largely flat sales over the quarter to January 4, up just 0.2 per cent, in what it described as a “very tough sales environment”.

Recent figures from Kantar Worldpanel signalled no let up in the difficult conditions, showing the weakest growth in the overall grocery sector since 2005.

The data revealed that till rolls were 2.4 per cent higher in the 12 weeks to February 2 – which includes inflation of 2.1 per cent.

Asda joined Tesco and Bradford-based Morrisons in losing market share over the period, to 17.3 per cent from 17.7 per cent a year earlier, even though it managed to grow sales by 0.5 per cent, according to Kantar.

But Leeds-based Asda narrowly maintained its position as Britain’s second biggest supermarket despite Sainsbury’s closing the gap with a rise to 17.1 per cent.

Andy Clarke, chief executive of Asda, cautioned last February that 2013 would be a “challenging and uncertain year”.

His comments came as it reported a 0.1 per cent rise in like-for-like sales, excluding petrol, for the 14 weeks to January 5, 2013, while full-year sales lifted one per cent.

It has since suffered three quarters in a row of slowing growth, prompting the group to announce a £1bn price-cutting plan in November.

Its parent group, Wal-Mart, has already warned over its annual results earlier this month after facing additional charges relating to its Brazilian business.

The group also said it expected sales at US stores to be slightly below expectations and cautioned that full-year adjusted earnings may come at or slightly below the low-end of its prior forecasts.

The average UK household had £158 a week of discretionary income in December 2013, according to the latest Asda Income Tracker. Discretionary income rose £2 a week year-on-year in December, below the £165 all-time high seen in January 2010. Asda said the £2 increase was driven by a sharp downward trend in inflation and a fall in unemployment to 7.1 per cent, the lowest rate in four years. Asda said that slowing inflation helped to hold down the price of essential items in the run-up to Christmas.