Asda have reported its worst sales figures in the 16 years since Walmart took over the company. The disappointing figures are a result of the continual loss of customers to discount stores. Sales were down 3.9 per cent in the first quarter and 4.7 per cent in the second. The new national living wage to be introduced in April 2016 will also cost the company, who have around 160,000 employees, tens of millions extra which has the potential to increase prices at the store according to the CFO of the company.
This comes as more bad news for Asda as they were beaten to second spot, behind Tesco, in the second quarter by Sainsbury’s as the UK’s largest supermarket chain. The chain, which is based in Leeds, has insisted that an ‘impulsive’ market and increasingly ‘promiscuous’ customers attracted by discount stores are responsible for the company’s recent shortfalls. In addition, a move to up wages and employee hours have also played a part in the lower earnings.