Britain's Asda Blames Brexit Uncertainty For Lower Sales
Asda, the British supermarket arm of US retail giant Walmart, reported a fall in underlying sales in its latest quarter, saying uncertainty surrounding the UK's exit from the European Union had negatively affected spending patterns.
The group, whose attempt to be taken over by rival Sainsbury's for £7.3 billion (€8.5 billion) was blocked by Britain's regulator in April, said on Thursday comparable sales fell 0.5% in its fiscal third quarter, versus a second quarter rise of 0.5%.
Asda said its gross profit rate fell, reflecting price markdowns in clothing following a softer summer season versus last year. The fall in gross profit rate, plus increased operating expenses, meant operating income was also lower.
Prime Minister Boris Johnson has called a snap election for 12 December to try to break a deadlock over a Brexit deal. Britain is currently due to leave the bloc by 31 January.
'Little Respite From Political Or Economic Uncertainty'
"This quarter has afforded consumers little respite from political or economic uncertainty and this has shown in their spending," said chief executive, Roger Burnley.
With the Sainsbury's deal thwarted, Walmart, which purchased Asda for £6.7 billion (€7.8 billion) in 1999, said in May it was considering a path to a separate stock market listing for Asda.
Burnley told Reuters in July the timescale for a possible initial public offering (IPO) of Asda was two to three years.