* CEO can't guarantee food testing costs won't be passed on
* Says "shocked" by scandal, says there's "no excuse"
* Will "leave no stone unturned" to sort out supply chain
* Q4 like-for-like sales growth slows to 0.1 pct
* Slowdown reflects price investment in essential foods
By James Davey and Neil Maidment
LONDON, Feb 21 Britain's cash-strapped shoppers
may have to bear some of the cost of a more rigorous food
testing and policing regime in the wake of a scandal over the
discovery of horse meat in beef products, the boss of the
country's second-biggest grocer said.
"Can I say that nothing will be passed on (to consumers)? No
I can't," Andy Clarke, chief executive of Asda, the British arm
of U.S. retailer Wal-Mart, told reporters on Thursday.
He said it was, however, his intention that shoppers would
not face higher prices as a result of the scandal that has
spread across Europe since tests in Ireland last month revealed
some beef products sold there and in Britain contained equine
Last week Philip Clarke, CEO of British market leader Tesco
, was adamant raising standards "doesn't mean more
Asda was drawn into the scandal last week when it found
horse DNA in a beef bolognese sauce. It withdrew the product
from sale, along with three other beef-based products supplied
Asda's Clarke said he had been "shocked" by that discovery
and the wider scandal.
"There's no excuse for something criminal happening in the
network. That's just fundamentally wrong," he said, adding Asda
would "leave no stone unturned" in addressing issues in its
The CEO said it was too early to say how much this would
cost: "It will be whatever it needs to be to make sure we have
the most rigorous testing in place."
Clarke said the impact of the scandal on overall sales had
not been significant though shoppers had been switching to
vegetable ready meals and meat-free products.
SALES GROWTH SLOWS
Clarke was speaking after Asda said underlying sales growth
had slowed in the fourth quarter of its financial year.
The firm said sales at stores open for more than a year,
excluding fuel, were up 0.1 percent in the 14 weeks to Jan. 5,
having been up 0.3 percent in the third quarter.
The CEO said the fourth-quarter slowdown reflected a move to
further back its "every day low prices" (EDLP) strategy with 100
million pounds ($153 million) of extra investment in the prices
of essential products such as milk, bread, eggs and sugar.
"We took a very conscious decision as an organisation ...
that meant that we were going to hold back inflation to grow
volume," said Clarke.
Chief Financial Officer Richard Mayfield said that decision
had driven positive like-for-like sales volumes so far in 2013.
"After three years of volume decline across the industry
(that) is a significant positive story for us," he said.
Britain's grocers are finding growth hard to come by,
despite their focus on essential goods, as consumers fret over
job security and a squeeze on incomes.
Last month Tesco posted a 1.8 percent rise in like-for-like
sales for the six weeks to Jan. 5, against a weak figure in the
previous year. Sainsbury's, the No. 3 grocer, reported
a 0.9 percent rise in like-for-like sales for its third quarter
to Jan. 5, while No. 4 player Morrisons saw
like-for-like sales fall 2.5 percent in the six weeks to Dec.
Asda does not expect consumers to be better off in 2013.
Clarke said its research of Britain's mothers found that 60
percent of them could not afford to keep the heating on for as
long as they needed to, while a quarter said they were unable to
buy the food they needed to feed their family a healthy diet.
Asda's sales update was released as parent Wal-Mart, the
world's largest retailer, posted a higher quarterly profit and
raised its dividend.