Asda points to ‘encouraging signs’ as its sales decline slows

The big four supermarket claims its fourth quarter numbers prove things are finally improving.

Asda saw sales at stores open for more than a year fall by 2.9% in the three months to 31 December, with the latest decline marking Asda’s 10th straight quarter of falling sales. However, despite the latest fall, it says it is “encouraged” by the numbers.

The figures mark an improvement on the third quarter, when Asda’s sales fell 5.8%, while the struggling supermarket giant claims to have enticed 140,000 extra customers through its doors over the fourth quarter.

“We are encouraged by the early signs of our customers responding positively to the hard work that’s been happening in our stores throughout 2016, which saw us welcome over 140,000 customers back to Asda this last quarter,” explains Sean Clarke, Asda’s president and CEO.

“We are putting customers first and have sharpened our prices, improved our ranges and availability, all with friendly service. It is great to see our colleagues, who really make the difference, engaged in this change in doing what’s right for customers.”

His boss and Walmart CEO Doug McMillon has a straighter perspective. He adds: “In the UK, we faced some challenges this past year and we’re addressing this with urgency. We still have a lot of work to do.”

Asda’s stock has fallen significantly over the last 18 months due to a resurgent Tesco and Morrisons as well as its price-focused messaging losing resonance due to the continuing rise of the cheaper discounters Aldi and Lidl. However, according to YouGov BrandIndex, its brand health is getting back on track.

Over the last 20 weeks, Asda’s reputation score has risen by 3.2 points – a rise deemed statistically significant and placing it 11th on a list of the UK’s 26 biggest grocers.

Yet it appears marketing isn’t having much of an impact on this potential turnaround. For the same period, Asda’s ad awareness score fell 1.1 points – a decline also deemed statistically significant.

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