UK market "undergoing significant and permanent structural change", Asda claimed

UK market "undergoing significant and permanent structural change", Asda claimed

Asda, the UK's second-largest grocer, ended its 2013 financial year with a fall in underlying sales in the fourth quarter.

In the 13 weeks to the 3 January, Asda saw comparable sales drop 0.1%, underling the retailer's worsening sales performance as it moved throughout the year.

For its third quarter, like-for-like sales were up 0.3%. In the second quarter, LFLs were up 0.7%; in the first quarter, they increased 1.3%.

Over the year as a whole, Asda's comparable sales inched up 0.5%.

Asda parent Wal-Mart, which also issued its fourth-quarter and annual results today, said its UK arm saw its operating income fall 1.5% in the quarter thanks to "expense headwinds".

Wal-Mart cited "indirect taxation, employment costs and investments in e-commerce".

Asda CEO Andy Clarke said: "It will come as no surprise that 2013 was a tough year for UK retailers and there's little doubt that the UK retail market is undergoing significant and permanent structural change."

However, Clarke said Asda had moved to "redefine value retailing in the UK" and pointed to its announcement in November it would spend GBP1bn on lowering prices in a bid to "widen the gap" with its big three rivals, Tesco, Sainsbury's and Morrisons. 

The offensive on price was one of a set of "strategic priorities" for the next five years.

Asda plans to spend GBP250m on "quality, style and design" across its product portfolio and expand further in parts of the UK where its market share is low, particularly London and the South East. It also plans more investment online, with a target of 1,000 click-and-collect points in the next five years.

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