Asda in slow lane ahead of £14bn merger

ASDA sales have been slowing as it awaits a crucial decision on its £14bn tie-up with Sainsbury’s.

The grocer, which is owned by US giant Walmart, reported a 1pc rise in sales during the three months to December 31 – its seventh consecutive period of growth.

But it marks a slowdown from earlier in the year as Britain’s Big Four supermarkets battle to lure shoppers away from the ultra- low prices offered by German discounters Aldi and Lidl.

Asda said sales were boosted by its own-brand products.

Company chief executive roger Burnley said: ‘Whilst I am pleased with our performance in 2018 we must remain focused on ensuring the long-term sustainable success of Asda.’

The Competition and Markets Authority is expected to publish its preliminary findings on the planned Asda and Sainsbury’s merger in a matter of days. The two could have to sell as many as 100 stores as part of the deal if competition concerns are raised.

By joining forces they hope to squeeze suppliers and lower prices, as they scramble to win back customers.

Despite a slowdown at Asda, it has been outpacing its larger potential partner Sainsbury’s, which was the only supermarket to record a drop in sales over Christmas, falling 1.1pc.

Sainsbury’s chief executive Mike Coupe has been accused of taking his eye off the ball and allowing store standards to slip amid its plans to merge with Asda.

Clive Black, analyst at Shore Capital, said: ‘If rejected, or incapable of completion, then we will watch with interest to see Walmart’s next move, be that a non-food merger, financial sale or even an IPO.

‘Whatever the outcome, Asda in its present form is not the future. In current circumstances we believe roger Burnley deserves credit for his focus in uncertain times.’