Asda suffers 11th quarter of falling sales

Asda has reported falling sales for an 11th quarter in a row as it continues to lose ground to its rivals.

The UK's third biggest supermarket revealed sales in the three months to end of March fell 2.8% on a like-for-like basis.

It was a slight improvement on the previous quarter, but analysts warned more work was needed.

By contrast, Asda's parent company, Walmart, revealed a 1.4% rise in like-for-like sales in its native US market.

No complacency

Asda's latest fall was nowhere near as bad as the 7.5% drop in quarterly sales that it reported in August last year, and was slightly better than the 2.9% decline seen in the final three months of 2016.

But chief executive Sean Clarke admitted more needed to be done to recover.

He said: "We're pleased that the momentum of Q4 has continued into the New Year with a third consecutive quarter of improvement.

"Despite this progress we are in no way complacent and there is still much for us to do."

Bosses in the US said the results were a "sequential improvement" when accounting for the lack of a leap year and a later Easter this year.

The number of shoppers heading to Asda stores fell 2% during the period and the average amount spent by customers also dropped by 0.8%.

Asda has suffered hardest of the Big Four UK supermarkets, which includes Tesco, Sainsbury's and Morrisons.

The rivals have all had problems, but have managed to improve their performance in the past year.

German discount rivals Aldi and Lidl have eaten into the Big Four's market share, although their rapid expansion of recent years has slowed.

Tom Berry, associate retail analyst at GlobalData, said: "Asda's position as the main UK discounter prior to Aldi and Lidl's arrival, means they will suffer greatest in terms of losses in market share."

Amazon threat

In the US, Walmart said it was a "sold first quarter" for the business, with sales hitting $117.5bn - which was in line with analysts' expectations.

The company, which used to be the world's biggest retailer, has been investing heavily to tackle the endless threat from Amazon.

Bosses have snapped up a series of rival online businesses to try to temper Amazon's rise - particularly as the latter eyes up further expansion of its grocery delivery service.

Asda had previously been the jewel in the crown for Walmart, but a focus on profits over sales has been blamed for the UK supermarket's recent poor fortunes.