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Q2 like-for-like sales fall at Asda

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by Kay Mitchell

Supermarket giant Asda has today announced like-for-like sales (excluding fuel) declined by 0.4% in the second quarter.

The fall was attributed to the tough austerity measures introduced by the Government, which has hit consumers, according to Asda.

“Asda’s customers are facing recently announced tax increases and cuts in Government spending,” it said in a statement.

The Wal-Mart owned supermarket expects a difficult outlook as a result of the tough measures.

The group, which is the UK’s second largest grocer, said total sales rose “in the low single digits” in the three-month period.

Meanwhile, Wal-mart, which is the world’s largest retailer, unveiled a 3.6% rise in profit.

Commenting on the UK’s results, Wal-Mart International president and chief executive, Doug McMillon, said: “Asda’s customers are facing recently announced tax increases and cuts in government spending. These are likely to cause our UK customers to face a challenging 12 to 18 months.”

In May, Asda announced it would buy 193 UK stores from Danish discount retailer Netto, in a deal worth £778 million.

Netto, currently owned by Dansk Supermarked, has operated in the UK since 1990. The company said it now plans to concentrate on expanding in Scandinavia and Northern Europe.

At the time, Asda said that it hopes to complete the deal later in the summer, pending regulatory approval from the Office of Fair Trading.

Asda said the deal will help it expand its smaller store formats, as well as its non-food Asda Living chain.

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News posted: August 17, 2010

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