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Asda sales drop as £15bn cost of living package not enough, says boss

// Asda first-quarter sales drop against strong like-for-like comparables
// The grocer said like-for-like sales fell 9.2% in the three months to March 31, 2022

Asda has seen its first-quarter sales decline against strong like-for-like comparables thanks to the squeeze from the cost-of-living.

The grocer said like-for-like sales fell 9.2% in the three months to March 31, 2022, compared with an “exceptional period” in the first quarter of 2021.

Food sales for the period were down 7%, while clothing sales declined 19.3% and general merchandise sales dropped 23.7%.

READ MORE: Asda warehouse staff indicate strong support for strike

Asda said that during the period “households were squeezed by the removal of Ofgem’s price cap, resulting in gas price inflation of 95% and electricity prices rising by 53% in April”.

With inflation affecting food prices, Asda’s Income Tracker recorded that household disposable income fell to an average of £205 per week – the lowest figure since October 2018.

Asda chairman Lord Stuart Rose said the government’s £15 billion cost of living handout is not enough to help struggling families and only a “drop in the ocean” compared with the pressures consumers are facing.

Rose said he welcomed the one-off payments by chancellor Rishi Sunak, worth a minimum of £400 for all households and up to £1,200 for the poorest, but “there is still going to be continuing pressure and a lot of toughness for people”.

He expects inflationary pressures to continue into next year.

Asda has invested £90 million into expanding its new Just Essentials value range and dropping and locking the prices of more than 100 family-favourite products until the end of the year.

During the period, Asda also announced it would increase hourly pay for shopfloor staff from £9.66 to £10.10 per hour from July of this year.

Asda co-owner Mohsin Issa said: “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.

“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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The post Asda sales drop as £15bn cost of living package not enough, says boss appeared first on Retail Gazette.



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