Newspaper article The Journal (Newcastle, England)

More Trading Woes as Asda Loses Its Position

Newspaper article The Journal (Newcastle, England)

More Trading Woes as Asda Loses Its Position

Article excerpt

Byline: RETAIL HOLLY WILLIAMS business@ncjmedia.co.uk

ASDA revealed further trading woes after it posted another hefty drop in sales, and figures con-firmed it has lost its position as Britain's second biggest supermarket to rival Sainsbury's.

The chain, owned by US retail giant Walmart, said like-for-like sales fell 4.5% in the 13 weeks to September 30, which comes after a 4.7% fall seen in the group's second quarter.

Asda boss Andy Clarke said the latest sales decline came in "another challenging" quarter for the group, but put faith in his recently-announced turnaround plan - dubbed Project Renewal - to bolster trading.

The quarterly figures come as industry data from Kantar Worldpanel also showed market share losses have seen Asda overtaken by Sainsbury's, slipping back into third position with the biggest sales fall of the Big Four players in the last 12 weeks. Mr Clarke said: "There's no doubt this represents another challenging quarter. Sales volumes remain under pressure from price deflation and the intensely competitive background remains throughout the food sector."

But he added the group has the "financial strength and clear plan to sustain us through this period".

Asda's 18-month overhaul - announced last month - will see it slow store expansion in London, ease up on plans to build more stand-alone petrol stations across the UK and scale back the roll out of its "click and collect" scheme as it seeks to cut costs.

However, it will speed up investment to revamp 95 of its largest stores and spend more money on offering customers lower prices in an attempt to take on the discounters.

It will also permanently close its business to business sales operation, which focused on selling direct to other businesses, in the next few months.

On reporting the group's third quarter figures, Mr Clarke said despite being a "slow and costly" process to overhaul the business, it was a "logical and necessary adjustment of our existing strategy, to better address the immediate challenges and permanent changes the market is facing". …

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