Wal-Mart’s Asda Says Sales Growth Slowed as Consumers Struggle

Asda, the U.K. supermarket chain owned by Wal-Mart Stores Inc. (WMT), said sales growth slowed in the second quarter amid restrained shopper spending.

Sales at stores open at least a year rose 0.7 percent from a year earlier, excluding fuel and value-added tax, the Leeds, England-based retailer said today in an e-mailed statement. Same-store revenue gained 1.3 percent in the previous quarter.

Asda, the U.K.’s second-largest grocer, is struggling to maintain its share of the market amid growing competition from discounters Aldi and Lidl and more upscale competitors such as Waitrose or J Sainsbury Plc. (SBRY) The chain’s share of U.K. grocery spending slipped to 17 percent in the 12 weeks ended July 7 from 17.3 percent a year earlier, Kantar Worldpanel said July 16.

“The British consumer remains under pressure,” Doug McMillon, president and chief executive officer of Wal-Mart International, said in the statement.

Aldi, rival discounter Lidl and Waitrose now have a combined 11.5 percent of the U.K. grocery market, 3.2 percentage points more than four years ago, Kantar said. That has “cut deeply into the available market share for the bigger retailers who are now having to compete for a contracting middle ground.”

Wal-Mart, the world’s largest retailer, said today that profit this year will be less than it previously expected after higher payroll taxes reduced customer traffic in the second quarter.

To contact the reporter on this story: Gabi Thesing in London at +44-20-7673-2153 or gthesing@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at +31-20-589-8505 or cperri@bloomberg.net

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