LONDON: Wal-Mart Stores Inc.’s U.K. arm Asda reported a 4.7% fall in same-store sales in the second quarter, as the company continued to be hammered by a change in customer behavior and a vicious price war that has buffeted the U.K.’s largest grocers.
Asda, which vies with J Sainsbury PLC, for the position of Britain’s second-largest grocer, has lost market share lately, as German rivals Aldi and Lidl have stepped up their game in the U.K.
Tuesday, Asda Chief Executive Andy Clarke called the results “disappointing, but a short-term picture.” He said Asda “won’t get sidetracked by the short-term fixes that are saturating the supermarket industry.”
In 2013, Asda laid out a £1 billion ($1.6 billion) plan to lower prices and said it would pump £250 million into improving quality. It also has been working to developing its click and collection locations, allowing people to order online and pick up in person.
The results come as parent company Wal-Mart on Tuesday cut its earnings guidance for the year and gave a soft outlook for the current quarter as wage increases and investments in its struggling U.S. business pressured profit at the world’s largest retailer.
Net sales at Wal-Mart’s international business dropped 9.6% to $30.6 billion, although stripping out currency impacts they climbed 2.8%.
