Asda Comparable Sales Slip Further in 2Q

By Ian Walker

LONDON--The decline in like-for-like sales at U.K. grocer Asda accelerated in the second quarter, according to its parent Wal-Mart Stores Inc. (WMT) Thursday, which it blamed on the competitive environment and food deflation.

For the quarter ended June 30, like-for-like sales at the U.K.'s third largest grocer by market share fell 7.5%, compared with a fall of 5.7% in the previous quarter.

Traffic, the number of customers both online and in stores, fell by 6% in the quarter, Wal-Mart said, while net sales were down 1.5%. Net sales are the value of goods bought by customers.

Wal-Mart Chief Executive Doug McMillon said the grocer's strategy to turn things around is focused on improving the retail basics. "We are simplifying and strengthening our offering through improved availability and assortment discipline, reducing costs and driving sales through strategic price investments," he said.

Wal-Mart said its U.K. management remains focused on improving retail basics through delivery of 'project renewal,' part of the company's plan to turn the business around.

The fall in net sales matched recent data from Kantar Worldpanel, which monitors the household grocery purchasing habits of 25,000 demographically representative households in the U.K., that showed the nation's average shopping basket in the 12 weeks ended July 17 being 1.4% cheaper than a year ago.

U.K. grocers have been struggling of late as German discount supermarkets Aldi and Lidl have taken both market share and sales away from the big four.

Asda had a 15.5% market share in the 12 weeks ended July 17, the latest data from Kantar. Tesco PLC's (TSCO.LN) market share was 28.3%, while J Sainsbury PLC's (SBRY.LN) was 16.3%.

-Write to Ian Walker at [e-mail]; @IanWalk40289749

(END) Dow Jones Newswires

August 18, 2016 08:33 ET (12:33 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.