Asda sales continue to increase

UK supermarket chain Asda has reported a rise in sales for the second quarter in a row, although the rate of the increase slowed.

The retailer, which is owned by US giant Walmart, said like-for-like sales rose by 1.1% in the third quarter of the year.

However, this was lower than the previous quarter's growth of 1.8%.

Asda chief executive Sean Clarke said the market would continue to be challenging into next year.

However, he added the chain had "clear plans and a renewed level of confidence".

Sales battle

Although Asda's sales have risen again, the number of trips to its stores fell by 1.4% in the third quarter compared with last year.

But Walmart's president and chief executive, Doug McMillon, said Asda shoppers were buying more from them: "The improvements in store experience and price investments are increasing store basket sizes."

Asda, based in Leeds, is the UK's third-biggest supermarket, after Tesco and Sainsbury's but before Morrisons.

All four are fighting hard against the rapid rise of the German discounters, Aldi and Lidl, which are both seeing sales rise in double digits, although that is partly because they are opening new stores.

Unlike their rivals, the German discounters do not give details of their like-for-like sales, which strip out new store openings by comparing sales in stores open for more than a year.

Asda and Morrisons have been hit the hardest by the expansion of the discounters, and both have seen sales fall.

'Aggressive plans'

Two weeks ago, Asda announced its current president and chief executive, Sean Clarke, would leave his post at the end of the year after just 18 months in the job.

He is being replaced by current deputy chief executive Roger Burnley, who was brought into Asda a year ago from rival supermarket Sainsbury's.

Tom Berry, retail analyst at GlobalData, said: "As Sean Clarke departs the grocer at the end of 2017, having steered it back into positive growth with the help of an inflationary market, Roger Burnley is set with the task of continuing the positive momentum.

"The key to [Mr] Burnley's success will be his ability to balance the heavy investment in price, stores and online against the need to pass costs on to consumers - all while the discounters march on with aggressive expansion plans and product diversification. "