Woe goes on as sales at Asda continue to slump

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Asda’s new boss Sean Clarke faced more bad news as the supermarket chain was named the worst performing grocer in the three months to September 11.

Sales at the beleaguered Leeds-based chain fell 5.4 per cent over the three month period according to Kantar Worldpanel.

This was in stark contrast to discount rivals Aldi and Lidl which saw sales growth of 11.6 and 9.5 per cent respectively.

All the big four saw sales declines although Tesco’s was reduced to a fall of 0.2 per cent - ​its best performance since March 2014.

Bradford-based Morrisons saw a 2.3 per cent decline as it sees the fall out from store closures. Elsewhere Morrisons saw an impressive 45 per cent increase in the number of online shoppers. Kantar Worldpanel said Morrisons’ online sales are doing particularly well in its Yorkshire heartland as well as in London.

​Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “In Yorkshire it’s down to the strength of the Morrisons brand. If you live in Yorkshire you’re much more likely to shop online at Morrisons.”

Morrisons is enjoying a renaissance under CEO David Potts and his new team whereas Mr Clarke is yet to make his mark at Asda.

“There is no sign of improvement at Asda yet,” said Mr McKevitt.

“It is still losing market share. Price cuts would have to be very substantial to have an effect. Asda is losing sales to the discounters and there is a general drift away from larger stores.”

Asda has a lot of big stores at a time when more people are shopping at smaller, convenience stores.

“Asda needs to do the basics better. Its own label isn’t strong and it needs to make its stores more pleasant to shop in,” said Mr McKevitt.

Aldi and Lidl have benefited from their new store opening programme, which boosted sales.

“We are still seeing good growth in basket size at Aldi and Lidl. They are not just known as cheap now. They also sell high quality items,” said Mr McKevitt.

Aldi and Lidl have collectively grown premium own label by 29.5 per cent in the past 12 weeks.

Kantar Worldpanel said supermarket sales increased 0.3 per cent overall, driven by growth in alcohol sales as shoppers celebrated Britain’s sporting prowess.

“While overall sales growth has been slow, consumers have been keen to celebrate Britain’s Olympic and Paralympic golden summer, boosting alcohol sales by 8.5 per cent in the past four weeks,” said Mr McKevitt.

“Sparkling wines including prosecco and champagne led the way with growth of 36.0 per cent as promotional events across a number of retailers successfully tapped into the nation’s celebratory mood.”

He added that the good weather in August and the mini heatwave in September also boosted alcohol sales.

Waitrose saw sales increase by 3.4 per cent, helping the upmarket retailer reach a new record market share of 5.3 per cent.

Co-op saw sales rise of 3.1 per cent, primarily through its own label lines.

Iceland’s recent run of success continued as sales rose 6.3 per cent, with its core ice cream and frozen fish categories doing particularly well.

Sainsbury’s sales fell by 1.4 per cent.

Separate data from Nielsen showed the Big Four players - Tesco, Sainsbury’s, Morrisons and Asda - saw two months in a row of sales growth by value and volume for the first time in more than two years.

The value of sales rose 0.4 per cent year-on-year in the four weeks to September 10, while sales volumes increased by 0.3 per cent.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “With both value and volume growth most weeks since the middle of July we’re seeing the green shoots of recovery for the leading supermarkets in their battle against the discounters and price deflation.”