Asda sales drop as boss Andy Clarke admits "pace and scale of change exceeded expectations"

Catherine Neilan
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Asda: Like-for-likes fell last year (Source: Getty)

The boss of Asda has warned that the retail sector is in “one of its most challenging and changeable periods in history” as the supermarket today posted a drop in sales in 2014.

The figures

Like-for-likes at Wal-mart owned Asda dropped one per cent in the 12 months to December 31, while fourth quarter figures were down even more – dropping 2.6 per cent for the 12 weeks to January 4.

Why it's interesting

Along with the rest of the Big Four, Asda has been struggling to grow of late, primarily as a result of the growth of discount grocers Aldi and Lidl, which have presented a particular challenge to Asda, which has always focused on value.
But Clarke used the less-than-stellar results to highlight some of the changes he is bringing about in a bid to turn things around.
Speaking at a London event this morning he detailed a £600m investment plan that will expand and improve Asda's store estate as part of that process, which is also expected to result in widespread redundancies as part of a “modernisation” process.
That money will be spent on:
  • 17 new stores will be opened, including three supermarkets in London
  • A “major remodel” of 62 stores to reflect changing shopper habits
  • More than 150 new remote Click and Collect sites will be opened
  • 36 new petrol stations will also open this year
Asda's online team will also make better use of its subsidiary International Procurement “to share expertise and innovation”.

What they said

While the company had put in place a plan to address the changes faced by the supermarket sector, which helped keep "the ship steady in a turbulent market", Clarke admitted "the pace and scale of change has exceeded all expectations".
“The first year of our plan was very much about building the foundations –a work out to limber us up for what is to come in 2015 – by leading the price agenda in a deflationary market.
"We have a clear plan for sustainable, profitable growth and creates a proposition that gives customers what they want."

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