- Grocer to invest further 500 million pounds in lowering prices
- CEO anticipates intense pressure for U.K. grocers in 2016
Wal-Mart Stores Inc.’s Asda has pledged to invest an additional 500 million pounds in cutting prices, creating further upheaval for the U.K.’s largest supermarket chains.
To fund the move, Asda is changing how it buys products. The grocer is joining Europe’s leading buying alliance European Marketing Distribution, which pools the collective power of 250 supermarket chains, to make the required savings. Asda expects 2016 to be another challenged year for U.K. grocers.
“The rise of the limited assortment discounters means that we must take radical action to win back our customers." Chief Executive Officer Andy Clarke said in a statement Sunday.
Asda’s latest price cuts come at a time when its sales are falling at a faster rate than at any of its rivals, despite being more than 12 months into its existing five-year plan to lower prices by 1 billion pounds ($1.45 billion.) The grocer’s move signals that the price war among U.K. supermarkets, prompted by the growing popularity of discounters Aldi and Lidl, is set to continue into 2016.
Asda will disclose its fourth quarter results on Feb. 18.