Sales at Wal-Mart's British supermarket, Asda, slumped 4.7 percent in the second-quarter, as it failed to get to grips with a fierce price war brought on by discount retailers. Hayley Platt reports.
The battle of the supermarkets rages on in Britain. Sales at Walmart's British supermarket, Asda, fell in the second quarter by 4.7 percent, its worst decline in over five years. It confirms Asda as the weakest performer in a sector hammered by the rise of no-frills competitors. Kantar Retail's Bryan Roberts. SOUNDBITE: Bryan Roberts, Director of Retail, Kantar Retail, saying (English): "They continue to be pressured by the discounters, not just Aldi and Lidl but also the high street discounters like B&M and Home Bargains as well and that's applying lots of pressure." And analysts aren't sure where future growth is going to come from. As well as being squeezed by the discounters, supermarkets are also being hurt by falling food prices as a result of record commodity-led deflation. SOUNDBITE: Bryan Roberts, Director of Retail, Kantar Retail, saying (English): "There is a growing realism that sales growth will be slow, if it exists at all, profitability will have to decrease in terms of having lower margins ready to counteract the discounters." The slump in Asda's sales, which mainly trades from large out-of-town stores, increases pressure on Chief Executive Andy Clarke, whose strategy of cutting prices has yet to deliver at the tills.