Asda supermarket chiefs blame Brexit fears for dip in sales

14 November 2019, 14:10 | Updated: 14 November 2019, 15:42

Asda bosses have blamed "customer concerns over Brexit" after the supermarket giant saw a drop in sales.

The UK chain reported a 0.5% fall in like-for-like sales in the quarter to 30 September, as it slid from 0.5% growth in the previous period.

Doug McMillon, the boss of Asda owner Walmart, said Brexit concerns "continue to negatively affect customer spending patterns" for the chain.

Asda chief executive and president Roger Burnley added that customers have had "little respite" from political and economic uncertainty in recent months, which has influenced spending.

The sales figures come as the supermarket remains embroiled in a dispute over new staff contracts, which a union has claimed could persuade shoppers to go elsewhere.

The GMB argues the new agreement removes paid breaks and changes shift patterns.

Asda says most of its employees have signed the contract, adding that basic pay will increase, while workers will receive an enhanced package including an annual bonus.

The big four supermarkets - Tesco, Asda, Morrisons and Sainbury's - have also been struggling with shrinking market share as shoppers opt for discounting rivals Aldi and Lidl.

Asda and rival Sainsbury's sought to meet the competition by agreeing a multibillion-pound merger last year, but the move collapsed after it was blocked by the Competition and Markets Authority (CMA) in April.

In July, Mr Burnley said Asda could be floated on the stock market in the next two or three years, as Walmart looks to offload the UK business.

Despite the slump in total sales, Asda said it saw "strong" online grocery sales over the period, which it claimed was "two times the growth of the overall market".

Mr Burnley said the company will "work hard to keep prices low" for customers despite weaker consumer spending.

He added: "I am absolutely committed to securing the future of our business for the benefit of our colleagues, our customers and our communities - whatever external challenges we may face.

"As we enter the busiest trading period of the year, I am confident that we are ready and raring to go and I would like to take this opportunity to say thank you to every one of our colleagues, who I know will pull out all the stops to make this Christmas extra special for our customers.

"Whilst the retail sector continues to face challenges as a whole, I know that Asda is built on strong foundations and is at its best when we are able to work as one team, delivering for our customers."