Asda sales slumped over the crucial festive trading period due to “cautious” consumer spending, as shoppers reined in their Christmas lists.
The supermarket giant said like-for-like sales excluding petrol dropped 1.3 per cent in the three months to the end of December.
The sales drop was driven by “challenging market conditions”, particularly in Asda’s clothing division George.
Asda boss Roger Burnley also said shoppers were holding back on buying presents for adults and extended family, focusing instead on children’s gifts.
However, the Walmart-owned company’s core food business was “more stable”, it said.
The grocer’s upmarket brand Extra Special reported a five per cent sales rise year-on-year, while home shopping jumped 10.3 per cent.
Asda said it would continue to sign up in-store partners throughout the year, following trials with Sushi Daily and Claire’s Accessories in a number of stores.
Burnley said: “We know that our customers mind sets during the quarter were cautious and whilst customers were enthusiastic for Christmas, they were more mindful in their spending – with many choosing to pare back gist lists and focus presents on kids rather than adults and extended family.”
The other major UK supermarkets were also affected by the challenging trading conditions over the festive period.
Tesco’s UK and Ireland like-for-like sales jumped 0.4 per cent in the 19 weeks to 4 January, but group sales were down 0.9 per cent.
In the 22 weeks to 5 January, Morrisons saw sales excluding fuel fall 1.7 per cent, and Sainsbury’s reported a like-for-like sales growth drop of 0. 7 per cent in the 15 weeks to 4 January.