Asda chief: I’m here to stay

ASDA chief executive Andy Clarke insisted he is ‘here to stay’ after the grocer posted its worst- ever trading figures.

The supermarket boss was forced on the defensive after a raft of price cuts and new initiatives failed to kick start growth.

Underlying sales at Britain’s second largest grocer fell 4.7pc for the 11 weeks to June 30. But Clarke, who has so far kept his job while rivals such as Phil Clarke at Tesco and dalton Philips at Morrisons were losing theirs, emphasised he has no plans to fall on his sword.

‘I want to silence a bit of speculation,’ he said.

‘I have never seen so much controversy about if Clarke is staying or going. I’m here to stay.’

Poor performance over the last f ew quarters had prompted rumours that Asda owner Walmart was looking for fresh leadership.

Clarke was bullish about his position and the fortunes of the business describing the fall as ‘a nadir’ and hinting that third quarter sales were showing ‘ signs of green shoots’.

The 4.7pc decline follows a 3.9pc fall in the first quarter but Clarke insisted his plan was on track.

‘We are two years into a five-year strategy,’ he said. ‘It’s working and we are committed to seeing it through.

‘When we set the plan, who could have predicted the market would melt down?’

All of the supermarkets have struggled amid fierce competition from the discounters, including Aldi and Lidl, which has sparked a price war.

Asda has seen its niche as the leader on low prices slowly eroded and has been forced to change its image.

The grocer has a new campaign which highlights all its various services under one roof, from opticians to its George clothing division, in an effort to attract new customers looking for convenience as well as low prices.

Clarke said the business needs to move faster and more efficiently and that it would look for further cost savings on top of the £300m already achieved in the last 18 months. It is also experimenting with stores on the High Street – a new direction for the chain which has most of its outlets in large outof-town sites.

Clive Black, an analyst at broker Shore Capital, said: ‘We cannot remember such weak same-store sales from the group in recent times. But Asda most certainly is not going away.

‘Management continues to focus on being a simple and straightforward business seeking lower costs, fewer gimmicks and a more accessible, arguably honest, approach to grocery retailing.’

In November 2013, Asda set out its priorities over a five year period. Its strategy centres around improvi ng t he main supermarkets; expanding into new areas; and moving t he brand i nto new services.

The company said i t would achieve this by investing £1bn in l owering prices and £ 250m in revamping stores.

Clarke said: ‘We continue to navigate a steady course through the worst storm i n retail history, despite another challenging quarter.’

He added that 2015 could be a volatile year and that he did not expect sales to be positive, but said he was not distracted by the short term picture.

‘We have an enviably stable business with balanced books and the right strategy to return us to sales growth,’ Clarke said.

Asda’s results were announced soon after Sainsbury’s fired its latest salvo in the industry price war.

It is extending its price-matching scheme to online orders.

Wal-Mart, the US supermarket giant that owns Asda, has also posted weaker than expected quarterly earnings and lowered its fullyear forecast.