Asdas new bosses today warned shoppers faced “stark challenges” ahead, after reporting a like-for-like sales decline of more than 9% during the first quarter of the financial year.
The supermarket blamed the fall on the exceptional sales of Q1 last year, which coincided with the UK’s third national lockdown, which saw a boom in supermarket sales.
Last year’s period also benefited from an earlier Easter holiday.
Like-for-like food sales slid 7% versus the previous year, which Asda said reflected a shift back into eating out of home following the removal of lockdown measures.
However, the fall in sales was felt even more strongly in clothing (–19.3%) and general merchandise (–23.7%), which it put down to stores that benefited from the closure of non-essential retail last year.
Today’s announcement to investors saw its co-owner Mohsin Issa stress the “severe cost pressures” facing consumers.
The supermarket’s latest Income Tracker showed households’ disposable income dropped by more than £40 per week year on year in April, the biggest fall since the tracker was created in 2008, with income most squeezed for those under 30 and over 75.
Asda flagged its investment of more than £90m in expanding its new Just Essentials value range, which has just begun hitting the shelves, as well as its ‘Dropped and Locked’ price campaign across 100 family favourites, which it said would last until the end of the year.
It said the investment strengthened Asda’s position as the lowest-priced big four supermarket.
“The latest Asda Income Tracker highlights the stark reality facing millions of families in the UK right now with household incomes more squeezed than ever,” said Mohsin Issa.
“Asda has a strong heritage of investing in price and customers can trust us to be on their side when they need it the most. We are investing in helping our shoppers manage the challenges of the here and now, as well as progressing critical strategic initiatives including loyalty, convenience and enhancing our in-store offering, which will all deliver long-term value.”
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