Asda Profits Fall By 19% As Competition Grows
UK retailer Asda has reported a pre-tax profit of £791.7 million for 2016, which represents a decrease of 19% year-on-year.
The supermarket chain posted the worst annual figures since being taken over by retail giant Walmart, reports The Guardian, with sales falling from £22.3 billion to £21.6 billion.
However, the company also reported an operating cash-flow of £1.41 billion, an increase of 8%, and said a dividend of £450 million was paid to Walmart.
“Our sales performance, relative to the market, was behind our expectations," said finance director Alex Russo. "However, in the last quarter of 2016, we saw an improvement following the changes made to our ranges and investment in price and service.”
The latest figures from Kantar Worldpanel show that Asda experienced a marginal increase in sales during the most recent quarter, but it remains behind market leaders Tesco and Sainsbury's.
It is also facing increasing competition from discount retailers Lidl and Aldi, which both experienced strong levels of growth during the period, with sales increasing by 19.4% and 17.9% respectively.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.