Asda blames 7.5% sales drop on fierce competition and food deflation

Fierce competition and food deflation have been highlighted as the key reasons behind a 7.5% drop in sales at Asda during the past three months, registering the supermarket’s worst quarterly performance on record.

Asda, which is part of Walmart, is currently committed to a £1.5 billion programme of price reductions, spread over five years, with the aim winning customers back, largely in the face of market share growth by the major discounters, Aldi and Lidl.

“Fierce competition and food deflation continue to challenge the (UK) market, significantly impacting traffic and sales trends,” said Walmart chief executive, Doug McMillon.

“Our strategy remains focused on improving retail basics; simplifying and strengthening the offer through improved availability and assortment discipline, reducing costs through our cost analytics programme and driving sales through strategic price investments where we remain committed to the previously announced five-year £1.5bn price investment.”

In terms of its commitment to British pork, meanwhile, Asda is bottom of the current porkwatch listing, published by AHDB.

The supermarket’s British pork facings in May this year stood at just 45%, down from 57% in March this year. The May percentage was also well below the British pork average of 79% for the top 10 supermarkets listed on porkwatch.

Asda’s British-sourced bacon figure for May was 24%, with ham at 32% and sausages at 71%.

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