Asda saw sales tumble in its first-quarter

Asda saw sales tumble in its first-quarter

UK retailer Asda has posted a fall in like-for-like sales in its first-quarter as a result of tough competition in the supermarket sector and traffic declines. 

The supermarket group said sales were down 5.7% in the 13 weeks ended 30 March. This follows a 5.8% slump in sales during the previous quarter; Asda's biggest sales fall on record.

The Wal-Mart-owned chain said the UK continues to struggle, due primarily to "fierce competition".

Wal-Mart CEO Brett Biggs, said: "Improvements in price and product availability throughout the quarter were not enough to overcome traffic and food volume declines in our large format stores. However, Project Renewal remains a focus with the aim to simplify and strengthen the customer offer, reduce costs and drive sales. The cost analytics programme made good progress and delivered savings we were able to invest back into the business."

Wal-Mart today (19 May) reported falling profits,  with earnings down 7.8% to US$3.08bn. Sales edged up 0.9% to $115bn.

US Q1 in brief: Wal-Mart, Urban Outfitters, American Eagle Outfitters

Neil Saunders, CEO of Conlumino, said Asda has lost its low price crown to players like Aldi and Lidl and, despite its best efforts to regain ground, has found one of its key points of differentiation undermined. 

"Unlike in the US, the UK grocery retail market is highly competitive and concentrated, and it has been hard for Asda to mitigate and offset its losses to the discounters with gains from other players."