ASDA, owned by US retailer Wal-Mart Stores, yesterday posted a slowdown in sales growth in its fiscal fourth quarter as shoppers cut back due to rising prices, muted wages growth and an uncertain economic outlook.
Chief executive Andy Clarke said he was instinctively optimistic about prospects in 2012 but said it was too early to say if positive recent data on the UK economy represented a turning point or was merely a blip.
Britain’s second-biggest supermarket chain behind Tesco said sales at stores open more than a year, excluding fuel and VAT sales tax, rose one per cent in the 14 weeks to 7 January.
That followed a 1.3 per cent increase in the third quarter, but compared favourably with many of its rivals, prompting Clarke to tell reporters: “We were the clear winners at Christmas, we won Christmas.”
Asda said underlying sales rose just 0.1 per cent in the last three months of 2011, followed by a surge in demand in the first week of January, when British shops traditionally offer unsold stock at cheaper prices.
Its parent company Wal-Mart said yesterday that price cuts had hit its fourth-quarter profit, but that it plans to trim prices further in the coming months, a move that is expected to keep shrinking margins.
The company’s shares, up more than 29 per cent since August, fell 4.2 per cent in early trading, erasing the gains seen so far in 2012.
Wal-Mart’s quarterly profit and sales fell short of Wall Street expectations. While price cuts in the US helped bring in more customers during the crucial holiday season, those customers did not spend as much as investors had hoped.
Wal-Mart US posted a 1.5 per cent increase in sales at stores open at least a year. It was the second quarter in a row that Walmart US same-store sales rose after nine consecutive declines.