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Asda faces UK struggle but Northern Ireland sales 'strong'

By Ravender Sembhy, PA

Published 19/08/2016

Supermarket Asda has reported its worst quarterly figures on record
Supermarket Asda has reported its worst quarterly figures on record

Struggling supermarket Asda has laid bare the challenge awaiting new boss Sean Clarke after reporting its worst quarterly performance on record.

But a spokesman for the supermarket said there were no plans to close stores. And he described Northern Ireland as "one of our strongest markets". The supermarket has 17 stores in the province.

The chain - owned by US giant Walmart - posted a 7.5% fall in like-for-like sales in the second quarter.

The results represent the eighth consecutive quarter of sliding sales and a worsening of the 5.7% drop seen in the previous period.

Mr Clarke, who took up the reins on July 11 after he was parachuted in to replace previous boss Andy Clarke, is attempting to turn Asda around amid a brutal price war in the supermarket sector.

Mr Clarke said he is "getting under the skin of the business", adding: "Although Asda is in midst of a very challenging period, there is no doubt in my mind that the culture that has always been at the heart of our success is still there.

"We've also started one of the biggest journeys of reinvention in our history to further build on our strong offer and I feel positive about the future."

The plan to revive Asda involves reduced prices through a previously announced £1.5bn investment, job cuts and improved ranges.

Walmart boss Doug McMillon said he was addressing Asda's decline in sales with "urgency".

"In the UK the competitive environment and food deflation continued to challenge the market, significantly impacting traffic and comp(arable) sales,"he said.

"Our strategy to turn things around is focused on improving the retail basics. We are simplifying and strengthening our offering through improved availability and assortment discipline, reducing costs and driving sales through strategic price investments."

Mr Clarke, who has also held top roles with Walmart in Japan and Canada, will find himself up against a resurgent Tesco and Morrisons, which are both undergoing their own turnarounds.

German discount duo Aldi and Lidl are also continuing to gain market share at the expense of the so-called big four - Tesco, Asda, Morrisons and Sainsbury's.

Walmart's chief financial officer Brett Biggs said: "In the UK, fierce competition and food deflation continue to challenge the market, significantly impacting traffic and comp sales trends.

"Our strategy remains focused on improving retail basics - simplifying and strengthening the offer through improved availability and assortment discipline, reducing costs and driving sales through strategic investments."

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