Another sales slide expected at Asda

Big-four grocer Asda is expected to come under pressure this week, with forecasts for another big dip in sales at the retailer as its other large rivals appear to be in recovery.

The Walmart-owned supermarket invested £0.5bn in price cuts earlier this year as the chain struggled to win customers from German limited-assortment discounters Aldi and Lidl.

Asda chief Andy Clarke has publicly maintained that the retailer’s strategy of consistent low prices, as opposed to “gimmicks” such as coupons or discount vouchers, is the way to growth.

“Asda’s over-reliance on price shows that the big four need to give shoppers more reasons to visit, to elevate themselves above the discounters,” said Verdict analysts at the weekend.

The grocer’s rivals - Tesco, Sainsbury’s and Morrisons - have also invested in price cuts recently, diluting Asda’s image as a low-price major retailer.

In February, the group posted a record quarterly fall with like-for-like sales sliding 5.8% after a dire Christmas, despite Clarke claiming it had reached the “nadir” of sales slumps in the prior quarter.

Kantar now expects Asda to post a further 5.1% slide in total sales this week, though the Telegraph pointed out on Sunday that the market research firm had previously been overzealous with its slump predictions at Asda.

In recent months, Morrisons has posted its second straight quarter of rising sales after dumping its chain of small convenience stores, while Tesco reported its first quarter of UK sales growth in three years and Sainsbury’s its first quarterly growth in two years.

The heat in the sector still shows no signs of slowing, with the privately-held Aldi and Lidl chains continuing to expand their footprints as shoppers lap up their private labels and deep discounts.

Clarke is expected to step down from Asda next year, the Telegraph added, and be replaced by Roger Burnley.

Burnley is currently on gardening leave from Sainsbury’s, where he ran the chain’s retail estate and logistics division.