By Paul Sandle
LONDON Aug 14 Asda, Britain's No. 2 grocery
business to Tesco, said on Thursday that sales growth
fell in the second quarter as family budgets remained under
The Walmart-owned group, whose core customers have
seen wages stagnate over years of economic downturn, said sales
at stores open for more than a year, excluding fuel and sales
tax, rose 0.7 percent in the 12 weeks to July 5, down from 1.3
percent in the first quarter.
"We're pleased with our results in a tough market," Chief
Executive Andy Clarke said on Thursday.
"We continued to grow our sales while also investing in
holding down the price of essentials," he said.
Asda - which also competes with Sainsbury's and
Morrisons - had a 17-percent market share in the 12
weeks to July 7, compared with 17.3 percent a year ago, industry
research company Kantar Worldpanel said last month. Tesco saw
its share fall by 0.6 percentage points, but it remained the
clear leader with 30.1 percent.
Retailers Aldi and Lidl have been attracting more customers
at the discount end of the market, while Waitrose has been
growing strongly at the top end.
The caution shown by Asda's customers was replicated in
Wal-Mart Stores Inc's other markets, prompting the discount
retailer to lower its revenue and profit forecasts for the
Clarke said Asda would continue to focus on driving volume
growth by keeping prices low on essential items such as milk,
bread and tomatoes rather than raising the top line through
Asda's reporting period missed most of July, when British
retail sales rose at their fastest annual rate in over two years
as a heatwave boosted sales of barbecue food and outdoor goods.
Clarke said the warm weather had been positive for Asda in
July, for example in boosting demand for summer clothes.
He said that despite Britain's growth prospects improving
slightly, Asda's consumers were still feeling the pinch.
"We are bumping along the bottom," he said. "That still
continues to reflect how the customer feels, how mum feels,
about how much money she has to spend on her weekly shopping
Tesco put the brakes on its expansion plans in Britain
earlier this year, calling a halt to the "space race" to build
more and more big stores and shifting its focus onto the faster
growing sectors of convenience stores and online sales.
However, Clarke said Asda would keep opening stores ranging
from its largest formats to supermarkets in areas where it was
underrepresented, as well as increasing online and mobile sales.
"We have 568 stores," he said. "We will continue to open
space, but as I signalled three years ago, I wasn't prepared to
acquire space at any cost, and that is the way we are going to
continue to invest."