Asda Posts a Drop in Quarterly Underlying Sales

Asda, for the first time in four years, posted a drop in quarterly underlying sales, due to lower food price inflation. The Britain's No. 2 grocer shared that high petrol prices and rising taxes would keep expenses passive.

Asda, owned by U. S. retailer Wal-Mart revealed that sales at stores open at least a year fell 0.3 percent, exclusive of petrol and VAT sales tax in the first quarter of the year, which was low from a surge of 4.6 percent in the final quarter of 2009.

The Chairman Andy Bond said, "By our own high standards, our first-quarter sales were disappointing. The market has slowed down significantly since the turn of the year, and I expect conditions to remain tough for some time". He added that elevated petrol prices and the prospect of tax increases to cut Government debt were hitting consumers.

Britain's grocers are witnessing a reduced speed in sales growth, but the food prices might be picking up again, according to the Government data on Tuesday.

Asda was suffering more than major rivals including market leader Tesco and J. Sainsbury, as per the data from market researcher Kantar Worldpanel.

Despite pressure on household budgets, shoppers were treating themselves after a long and deep slump, according to the researchers.