WALMART SIBLING ASDA SUFFERS WORST QUARTER ON RECORD
Asda has reported a drop in sales of 7.5% in the past three months, its worst quarterly performance on record. Walmart chief executive Doug McMillon blamed the dip on food deflation and “the competitive environment”.
Discount food stores such as Aldi and Lidl have been undercutting Asda and its rivals, including Tesco, Morrison and Sainsbury’s.
The supermarket chain is relying on £1.5bn of price reductions over five years to win customers back.
“Our strategy to turn things around is focused on improving the retail basics,” Mr McMillon said. “While our turnaround will take time, I’m confident in the new leadership team there and want to assure you we’re addressing this with urgency.”
In June, Walmart said the UK supermarket’s chief executive, Andy Clarke, would be stepping down to be replaced by the head of Walmart’s Chinese business, Sean Clarke.
Walmart said Mr Clarke’s experience would allow him to “reposition the business” in a competitive market.
Walmart, the US-based owner of Asda supermarkets, said its own net profit for the three months to the end of July rose 8.6% to $3.77bn (£2.87bn).
A rise in online sales helped revenue, excluding currency movements, to rise 2.8% to $123.6bn in the quarter.