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Asda admits turnaround efforts are 'not enough' as it posts 5.7% drop in sales

Published 19/05/2016

Asda posted a 5.7% fall in like-for-like sales for the 13 weeks to March 30
Asda posted a 5.7% fall in like-for-like sales for the 13 weeks to March 30

Embattled supermarket Asda revealed another hefty sales slump as it said price cuts and turnaround efforts were "not enough" to overcome its trading woes.

The chain - owned by US giant Walmart - posted a 5.7% fall in like-for-like sales for the 13 weeks to March 30, showing little improvement on the 5.8% drop seen in its Christmas quarter, which was its biggest quarterly sales fall on record.

Brett Biggs, chief financial officer at Walmart, said: "The UK continues to struggle, due primarily to fierce competition.

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

Asda said it saw a 5% drop in the number of shoppers visiting its stores in the first quarter.

The chain said it remained focused on its revival plan, dubbed Project Renewal, which is seeing it pump £500 million into cutting prices for shoppers in a fightback against its Big Four rivals and discounters Aldi and Lidl.

It added it was on track with moves to slash costs, having announced in January it would cut hundreds of UK jobs, largely impacting its Leeds head office, which employs 3,000 people.

Andy Clarke, p resident and chief executive, pledged to show shoppers a "new Asda face" through a revamped marketing push, led by a deal with TV chef James Martin.

The partnership will see Martin, who recently left the Saturday Kitchen show, provide recipes and cooking advice to families on a budget.

Mr Clarke said: "A new approach to marketing, including our partnership with James Martin, will show customers a new Asda face which showcases the values on which we have built the business over the years and reinforces our everyday low price value."

Turnaround efforts also include revamping stores and streamlining ranges, he said.

The latest trading fall marks the seventh quarter in a row of sliding sales.

Asda has been losing ground to rivals amid a fierce price war, with recent supermarket share figures showing it suffered the most out of the Big Four.

Its share of the sector fell to 16% in the 12 weeks to April 26, down from 16.9% a year earlier, according to Kantar Worldpanel.

Falling sales saw Asda lose its position as Britain's second biggest supermarket to rival Sainsbury's last year.

Morrisons, which has also been under pressure in recent years, posted its second quarter in a row of rising sales earlier this month as it succeeds in making a comeback.

The Bradford-based chain posted a 0.7% rise in like-for-like sales.

But the recent Kantar figures showed all of the Big Four apart from Sainsbury's suffered share falls amid the ongoing rise by Aldi and Lidl.

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