Asda has revealed plans to invest £600m in new and existing stores as it announces a 2.6% fall in like-for-like (LFL) sales for its final quarter of the year.
The supermarket released its trading statement for the financial 2014 year, including the 12 weeks to 31 December 2014, showing a yearly decline in LFL sales of 1%. This is the first time Asda has seen a decline in yearly sales since the recession.
Facing stiff competition from hard discounters Lidl and Aldi, Asda CEO Andy Clarke said during his announcement in London on Thursday 19 February, the industry was “in one of its most challenging and changeable periods in history”.
In a bid to keep up with the discounters, Asda spent £300m in lowering prices in 2014.
Clarke said it will now invest £600m in opening 17 new stores, while refurbishing and redeveloping 62 of the current stores.
Clarke commented: “2014 saw an acceleration in the structural shift in the market and whilst we saw it brewing and put the right plan in place to address it – delivering solid wins for our business and keeping the ship steady in a turbulent market, the pace and scale of change has exceeded all expectations.
“The first year of our plan was very much about building the foundations – a work-out to limber us up for what is to come in 2015 – by leading the price agenda in a deflationary market. We have a clear plan for sustainable, profitable growth, creating a proposition that gives customers what they want!