* Q4 underlying sales fall 2.9 pct
* Says 140,000 shoppers returned to Asda in quarter
* Says customers are responding to improvements
* Shares in Tesco, Sainsbury's, Morrisons all lower
(Adds detail, Asda CEO, Wal-Mart comment)
By James Davey
LONDON, Feb 21 Asda, the British supermarket arm
of Wal-Mart, said it had stemmed the pace of sales
decline over the last three months, suggesting new CEO Sean
Clarke's focus on pricing and product quality is starting to
have an impact.
Wal-Mart veteran Clarke, who joined Asda in July, and former
Sainsbury's executive Roger Burnley, who started as
chief operations officer three months later, have focused on
making Asda more competitive - sharpening its prices, improving
the quality and availability of product ranges and enhancing
Of Britain's big four grocers, which also include market
leader Tesco, Sainsbury's and Morrisons, Asda
has been most exposed to the advance of the German discounters
Aldi and Lidl.
While the other three traditional groups have upped their
game in recent years, Asda was slower to respond.
"We are encouraged by the early signs of our customers
responding positively to the hard work that’s been happening in
our stores throughout 2016, which saw us welcome over 140,000
customers back to Asda this last quarter," Clarke said on
Asda, based in Leeds, northern England, said sales at stores
open over a year fell 2.9 percent, excluding fuel, in the three
months to Dec. 31, its fiscal fourth quarter.
While that represented a 10th straight quarter of falling
sales, the outcome was in line with analysts' expectations and
was a significant improvement on declines of 5.8 percent and 7.5
percent in the previous two quarters respectively.
Monthly industry data has also indicated that Asda's trading
continued to improve through January.
Clark was brought in after Wal-Mart announced that Asda
would shift the balance of its trading strategy from protecting
profit to protecting market share.
Wal-Mart's Chief Financial Officer Brett Biggs welcomed
Asda's encouraging data but cautioned: "We have a lot of work to
do in this market."
Asda is Britain's third largest grocery retailer but has
lost over 1 percentage point of UK market share since 2014,
according to researcher Kantar Worldpanel. Its share currently
stands at 15.6 percent, versus more than 28 percent for Tesco.
Shares in Tesco were down 1.2 percent at 1432 GMT, while
Morrisons was down 1.3 percent, with Sainsbury's down 0.9
Asda has previously said it will cut prices equating to 1.5
billion pounds ($1.9 billion) of savings to the customer over
five years from November 2013, washing through at about 300
million pounds a year.
Separately on Tuesday, Wal-Mart reported
higher-than-expected U.S. comparable sales for the fourth
quarter, driven by higher customer traffic to stores and
accelerating online activity.
($1 = 0.8051 pounds)
(Editing by Kate Holton and Susan Fenton)