Supermarket retailer Asda has dropped 5.8% in like-for-like sales for the third quarter, while its parent company Wal-Mart's earnings have surged ahead of expectations.
Patrick O'Brien, an analyst with trend research agency Verdict Retail, said that Asda's positioning has hurt it deeply. It hasn't been able to cut prices as much as discounters Lidl and Aldi, nor offer a value-added experience akin to its Big Four rivals (Tesco, Sainsbury's, and Morrisons). "Unless Walmart wants to use its financial muscle to take the price war to a new level, it must demonstrate new reasons for shoppers to go there," he commented.
The retail giant has said that in order to improve Asda's performance, it needs to boost customer experience, increase product availability, and enhance service and price.
O'Brien said that one particular area Asda needs to focus on is its online delivery offer. Amazon and Morrison's have recently joined forces to offer one-hour grocery delivery, Sainsbury's Chop Chop service offers similar fast service, and Ocado and Tesco offer same-day delivery. Asda can only guarantee same day pick-up, and trails behind the rest in terms of speed and convenience.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. To subscribe to ESM: The European Supermarket Magazine, click here.