Asda pounded by store wars
A WONDER-FUL PERFORMANCE
ASDA was the big loser in last year’s fiercely contested supermarket price battles.
The US-owned chain – which employs around 165,000 staff members in Britain – admitted yesterday that its sales and profits collapsed in 2016.
Sales fell 3.2% to £21.7billion while profits slumped 19% to £791.7million. They’re the worst annual figures since the chain was taken over by Walmart in 1999.
Its biggest battle has been with the hugely successful German discounters Aldi and Lidl.
Their rock-bottom pricing policy has laid waste to Asda’s former proud boast of being Britain’s lowest-price supermarket.
It has left the struggling business posting 11 consecutive quarters of sales declines, which has seen the chain hit harder than its big four rivals Tesco, Sainsbury’s and Morrisons.
Boss Sean Clarke – a Walmart veteran – was parachuted in to the firm last summer to replace Andy Clarke and stop the rot.
He focused on boosting the quality of food ranges and made improving customer service a priority. But his biggest move was to embark on a fresh campaign of slashing prices of everyday items.
According to Asda the campaign has had some success. But that’s only by stemming the losses.
A year ago Asda posted its worst-ever quarterly sales fall of 7.5%. That was cut to a sales drop of 2.8% by the first three months of this year.
“The grocery market has continued to experience low growth throughout the year and competition in the sector has remained intense,” the company admitted.
Tom Berry of GlobalData warned: “Asda has been flailing without direction for too long, and a comprehensive plan is needed if it is to survive in the highly competitive UK grocery market.”
Asda’s accounts also revealed previous boss Andy Clarke and ex-chief customer officer Barry Williams received a combined £2.5million payoff. Blockbuster smash Wonder Woman has made around £600million worldwide since being released in May. That’s a great return on the estimated £113m it cost to make and has helped Time Warner, the studio behind it, post an 11.6% rise in quarterly profits to £800m, it revealed yesterday. Time is also still raking it in from the globally popular TV show Game of Thrones, which is in its seventh season. Revenue from the fantasy show climbed slightly to £1.1bn in the period. Time Warner is in the process of being brought for £64bn by US communications giant AT&T. The deal is waiting regulatory approval from US authorities.