It looks like Asda got the biggest lump of coal in its Christmas stocking. Amid fierce competition from its fellow ‘Big Four’ grocers and the ascendant Aldi and Lidl, the supermarket chain’s sales dropped by 5.8% in the last three months of 2015 – one of its worst quarterly declines ever.
That meant its like-for-likes dropped 4.7% across 2015, something boss Andy Clarke underwhelmingly described as a ‘difficult year’. All of the nation’s big supermarket chains have been struggling through a bitter price war but Morrisons, Tesco and Sainsbury’s all posted relatively upbeat updates after Christmas, suggesting they were over the worst. In that context Asda’s position looks even more precarious.
Clarke was keen to sound positive, insisting that, ‘we have steered a careful course through this very turbulent period for the industry and through a complex set of challenges.’ But his insistence that ‘this is not a business in crisis,’ sounds more than a touch defensive.
Asda's predicament doesn't come as a massive surprise. It has always sold itself on low prices, but now Aldi and Lidl have come along it has lost its edge. Clarke needs to find something new to catch customers' eyes.