Asda's new boss sees sales slump as rivals gain pace

ASDA'S NEW boss Sean Clarke faces a tough job ahead of him after sales slumped 5.6 per cent in the three months to July 17, the worst performance out of the big four supermarkets.

Asda has been outpaced by rivals
Asda has been outpaced by rivals

In contrast Lidl’s sales jumped 12.5 per cent and Aldi’s sales rose 11 per cent according to the latest Kantar Worldpanel data as shoppers continue to desert Asda in favour of the discounters.

​Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “It’s not good news for Sean Clarke. The numbers are slightly better than last time, but Asda needs to look at the weapons in its armoury. They will be thinking very hard about price.”

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Leeds-based Asda is rumoured to be mulling over a big new wave of price cuts in order to win back customers.

There was better news from Bradford’s Morrisons, which saw sales fall by 1.8 per cent, its best results since January. The decline reflects store disposals and Morrisons is expected to see an improvement once its former stores are taken out of the equation.

“Morrisons’ numbers are substantially impacted from the sale of the smaller store estate. We anticipate that Morrisons’ numbers will start looking better in late 2016.

They are doing the basics right and they are looking very hard at their range,” said Mr McKevitt.

Kantar Worldpanel said it has seen no impact ​on grocery prices or the volume of goods sold following the EU referendum.

​“I don’t think we’ll see an impact on volumes. In the financial crisis in 2008, we saw no fall at all in grocery spending.

Volumes actually benefited as people cut back on eating out,” said Mr McKevitt.​

​“​The nation’s average shopping basket is 1.4 per​ ​cent cheaper than a year ago, exactly the same level of deflation as reported last month, and it remains to be seen if the Brexit vote will bring about any price rises this year.”Some analysts think prices will rise as ​the weak pound makes imports more expensive and grocers import around 40 per cent of their products.

​Kantar said market leader Tesco’s sales fell 0.7 per cent, with its market share falling to 28.3 per cent - its slowest rate of share loss since March 2014. Sainsbury’s saw sales fall 1.1 per cent, partly reflecting a move to phase out multi-buy offers.

Rival research group Nielsen said the value of UK grocers’ sales fell 2.4 per​ ​cent over the four weeks to July 16 - the worst figure since 2014​, b​ut it blamed the decline on wet and cool weather rather than Brexit.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “The low point was the week ending July 2, and the weather is having a big impact on the industry at the moment, adding further pressure on sales from deflation and responding to the growth of discounters.

“The brief mid-July heatwave will have helped kick-start sales for the supermarkets, however August is an unpredictable month.”

Aldi and Lidl recorded record market shares of 6.2 per cent and 4.5 per cent respectively, as sales growth was driven by store openings.

They saw a five per cent increase in the number of shoppers visiting their stores.