Asda like-for-like sales decline as owner Walmart grows sales in the US

 
Caitlin Morrison
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Asda is owned by Walmart (Source: Asda)

Asda parent company Walmart reported net sales at its UK business went up in the first quarter of the year, but like-for-likes fell.

Net sales grew 0.9 per cent, the US retail giant said, while comparative sales were down 2.8 per cent.

This ties in with expectations of a decline in sales, and follows a similar report from before Christmas last year, when Asda reported its ninth consecutive quarterly decline.

Challenges ahead

"The group faces several challenges in an age where customer loyalty is difficult to win," said Derya Yildiz, senior analyst at Kantar Retail.

"Asda wants to clearly differentiate by being the destination for value-seeking busy customers but achieving this will not be easy and will come primarily through uncovering omnichannel habits of these target shoppers.

"One of the key weapons that Walmart will look to use in the upcoming period is positive relations with suppliers. The launch of Walmart Exchange in the UK, a shopper data sharing platform for suppliers, may help suppliers maximise growth and profits by doing things that only Asda can do such as catering to diverse demographics in value shopper segments of the UK."

Walmart US

Meanwhile, Walmart reported a 1.4 per cent increase in US like-for-like sales, while revenue also increased by 1.4 per cent, rising from $115.9bn (£88.9bn) in the first quarter of last year to $117.5bn.

Shares in the group were up by more than one per cent in pre-market trading.

"We delivered a solid first quarter and we're encouraged by the start to the year," said the retail giant's president and chief exec Doug McMillon.

"We're moving faster to combine our digital and physical assets to make shopping simple and easy for customers. Our plan is gaining traction, and I want to thank our associates for their hard work, ingenuity and commitment to our customers. Our customers have choices, and we have to earn their business with every interaction."

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