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Retail

Britain's Asda Blames Tough Market For Christmas Sales Fall

By Dayeeta Das
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Britain's Asda Blames Tough Market For Christmas Sales Fall

Asda, the British supermarket arm of the world's biggest retailer Walmart, reported a fall in underlying sales in the key Christmas quarter, echoing rivals in blaming a tough consumer backdrop.

The group, whose attempt to combine with rival Sainsbury's was thwarted by Britain's competition regulator in April of last year, said on Tuesday comparable sales, excluding petrol, fell 1.3% in its fiscal fourth quarter to 31 December - a deterioration from a third quarter decline of 0.5%.

Asda also said its gross profit rate, or margin, decreased, reflecting strategic price investments, discounting in the apparel market and a shift in mix towards lower margin categories.

'Food Business Proved More Stable'

"Whilst overall performance in the quarter was impacted by challenging market conditions – particularly in clothing – the supermarket’s core food business proved more stable," Asda said.

Last month the other three of Britain's traditional big four retailers - industry leader Tesco, Sainsbury's and Morrisons - all reported subdued Christmas trading, highlighting a challenging trading environment.

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Industry data published earlier this month showed all of the big four continuing to lose market share to German-owned discounters Aldi and Lidl, who, unlike the big four, are opening lots of new stores.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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