Asda hits out at rivals for using price gimmicks
Asda yesterday accused its supermarket rivals of resorting to “short-term gimmicks”, such as vouchers, to buy customer’s loyalty as the US-owned group reported a slump in third-quarter underlying sales.
The UK’s second-largest food retailer, said like-for-like sales fell 1.6 per cent in the 13 weeks to 30 September compared with a 0.6 per cent rise in the second quarter as the supermarket price wars escalated.
Chief executive Andy Clarke said it had been a “tough quarter” and warned that the pace of change in the market had accelerated.
However, he was quick to point out it was the only one of the big four grocers to have grown market share in the quarter, after cutting prices on thousands of everyday prices as part of a £1bn strategy launched last year.
“There are very clear winners and losers within our market from our perspective we are a clear winner along with the discounters and premium players like Waitrose,” he said.
Clarke attributed Asda’s success to its consistently low prices and attacked as short-sighted the heavy use of vouchering by his supermarket peers.
“Vouchering and discounting is playing an even stronger role in some retailers and we are not going to join these gimmicky games for short-term sales win,” he said.
Asda’s chief merchandising officer Barry Williams added that Sainsbury’s vouchering was the highest he had seen in years and mocked Morrisons’ prolific use of vouchers by comparing it to Mervyn King’s quantitative easing programme.
Clarke said he expected another tough quarter ahead and the profitability was likely to fall in line with sales as it continued to invest in reducing the price gap between itself and the discounters.
Separately, its parent company Wal-Mart reported a 2.9 per cent increase in third-quarter revenue.