Asda boss claims rivals are struggling to keep up
Like-for-like sales grew by a slender 0.5 per cent in the ten weeks to the end of June but chief executive Clarke said the business was outperforming competitors in a sector where the major operators are being squeezed by Aldi and Lidl at the bottom end and Waitrose and Marks & Spencer at the upper end.
Asda’s latest rise comes after growth of 0.1 per cent in the previous period and with recent updates from Tesco, Sainsbury’s and Morrisons all showing muted trading.
Asda said it was benefiting from its £1 billion investment in lowering prices and Clarke said rivals were only now catching up with its approach of ditching “gimmicks” such as vouchers, instead focusing on “every day low price”.
He said: “In some respects, the other three retailers are trying to copy us.”
Asda, which is the second-biggest UK grocer and is owned by US giant Walmart, said the price gap with the other three major chains was growing and that the difference with the discounters was as narrow as ever.
Its clothing brand George has become the second-largest clothing retailer by volume, boosted by the popularity of its school uniform offering.
Clarke stressed the continuing challenges from the economic climate a day after latest figures showed the first fall in average wages for five years and the Bank of England halving its pay growth forecast for 2014.
He said the price strategy addressed the fact there was a “two-stage recovery” with different experiences across the country.
Clarke said: “It feels very different if you are in London to Northern Ireland or the north- east [of England]. If you are a family on a budget in those difficult regions it still feels very challenging.”
He expressed cautious optimism about trading later this year.