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Asda struggles to keep up with "fierce competition"


Supermarket chain Asda has voiced its concern as its UK sales have “continue(d) to struggle”. Its most recent results reported a 5.7% drop in like-for-likes during the first quarter of the year as the grocer claimed to be experiencing “fierce competition”.

The results follow a 5.8% decline in sales in its previous quarter, Asda's biggest sales fall to date.

Asda’s parent company Walmart also reported slowing revenue, falling by 7.8% in the first quarter to $3.08bn (£2.1bn).

"The UK continues to struggle, due primarily to fierce competition," said Walmart's Chief Financial Officer Brett Biggs.

"Improvements in price and product availability throughout the quarter were not enough to overcome traffic and food volume declines in our large format stores.”

Consumer research firm Kantar Wordpanel noted that Asda is currently behind Tesco and Sainsbury’s in the race for the top supermarket sales.

Asda is aiming to revive its sales by lowering prices in order to lessen the gap with discounters such as Lidl and Aldi and widen its price comparison with its bigger rivals.

Duygu Hardman, an Analyst at Verdict Retail suggested that the big four grocer needed to compete in terms of quality as well as price.

"While Asda has traditionally attributed its suffering market position among the Big Four to the short-term tactics of its competitors, this is no longer the case with the focus shifting to value rather than price," Hardman added.

"Asda needs to achieve the right balance of price, quality and service if it wants to better address the fast-changing needs of its customers".

Published on Thursday 19 May by Talya Misiri

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