Asda returns to sales growth as it pushes on with job cuts

361
Asda update

Price cuts and store improvements have helped Asda achieve its first rise in quarterly like-for-like sales in three years.

Despite the slump coming to an end, the Big 4 grocer was still seeking to cut costs – which includes the thousands of redundancies it announced last week.

Sales at the retailer, without petrol taken into account, went up by 1.8 per cent in the three months to the end of July.

The Walmart-owned supermarket chain said this was boosted by a 16 per cent uptick over the Easter trading period as well as increased customer numbers and a return to grocery price inflation.

Adjusting for the timing of Easter, Asda’s like-for-like sales for the second quarter were up by 0.7 per cent on the same period last year as shoppers switched to cheaper rivals Aldi or Lidl.

The news comes after the comany last year reported its worst quarterly performance on record when sales plunged by 7.5 per cent.

In addition, accounts recently filed at Companies House revealed Asda had its worst fiscal year since it was acquired by Walmart in 1999, with profits dropping by 19 per cent.

READ MORE: Thousands of jobs at risk as Asda battles to cut costs

Walmart president and chief executive Doug McMillon said he was “encouraged” by Asda’s latest quarterly performance.

“In June, I visited Asda to see the progress being made. Customers are responding to investments in price and store experience by visiting the stores more often and increasing their basket sizes,” he said.

“There’s still much more to be done, but we’re clearly headed in the right direction.”

Meanwhile, Asda chief executive Sean Clarke, who took over the reins from Andy Clarke last year, said the supermarket had attracted 275,000 new customers during the second quarter.

However, he said it wasn’t a time to become complacent.

“We know we need to continue to up our game to be in the best shape possible,” he said.

”We will continue to work collaboratively with our suppliers to create the best products, make investments where they matter most to our customers, and ensure that we are fit for purpose in what remains a competitive market.”

Clarke has focused on targeted price reductions and has reduced the number of products on shelves by 25 per cent as part of a turnaround strategy.

The strategy also includes a massive cost reduction scheme which will see hundreds of employees’ working hours slashed and hundreds more lose their jobs altogether.

Click here to sign up to Retail Gazette’s free daily email newsletter

LEAVE A REPLY

Please enter your comment!
Please enter your name here