Asda Doing Better Than Other UK Retailers

Asda has reported sales and market share increases for the ten weeks to the end of June. Sales at sh…

Asda has reported sales and market share increases for the ten weeks to the end of June. Sales at shops open at least a year rose by 0.5 per cent from the same period last year and its market share increased by 0.14 per cent.

Online sales rose by more than 20 per cent.

The Wal-Mart owned company is performing slightly better than the other big four UK supermarkets, managing to keep its share of the market; Asda and Sainsbury's are the only big four supermarkets who have managed to do this. It is the only big four supermarket to increase sales in recent months. CEO Andy Clarke commented, "What’s clear from our performance from a market share perspective and our comp position is that we are differentiating ourselves now from the other big three retailers."

Asda has cut prices in a bid to keep pace with discounters Aldi and Lidl, which seems to be paying off. It is pledging to spend around £1 billion over the next five years to keep prices low. A slightly less popular tactic is the announcement of management and staff restructuring, which could see over 1,300 people lose their jobs.

However, there is some level of disparity between the performances of Asda stores in different regions of the UK. For example, the amount of disposable income is very different in Northern Ireland and the North East of England to that of London, and that has a knock-on effect. Clarke commented, "We're very mindful of that, which is why our strategy around value is working."

Commenting on the figures, Stephen Springham, senior retail analyst at Planet Retail said, “That Asda is outperforming its UK peers is no mean feat, but also hardly a badge of honour. The Big Four continue to lose share to smaller players and the market as a whole is still crippled by negative volume growth.

“Asda is standing its ground well and benefiting from the travails of both Morrisons and Tesco, with the restructuring and store-based redundancies announced earlier this year seemingly having had a limited negative effect on morale."