Asda spending extra £30million to raise basic shopkeeping standards after sales plummet
ASDA is spending an extra £30million on raising basic shopkeeping standards after admitting its sales have sunk below rivals.
The UK’s third-biggest supermarket reported same-store sales fell 5.3 per cent in the second quarter of the year as it lost shoppers to its growing competitors.
It is now attempting a fightback and throwing money at hiring more staff after customers had complained about empty shelves and difficulties with self-scanning tills.
The grocer admitted to challenges with untangling its IT systems from former parent firm Walmart since its £6.8billion takeover in 2021.
Michael Gleeson, finance chief, claimed it was “Europe’s largest IT transformation project”.
He said: “It was always going to be tricky, we have now changed payrolls, finance, depot and frontend checkouts and are working through stock replenishments.”
Asda said it was working on a “renewed trade plan” — focusing on boosting its shopper loyalty programme that has six million customers.
By comparison there are three times as many Nectar card users at Sainsbury’s.
The supermarket is making the changes despite still hunting for a permanent chief executive.
The search comes after former co-owner Zuber Issa sold his stake earlier this year.
His brother Mohsin Issa, still a co-owner, has signalled he will switch focus to the petrol empire EG Group, which he had built with his sibling, and will now be the sole chief executive of.
Mr Gleeson said Asda had to move ahead with its shake-up while waiting for a new boss because “grocery retailing is not a safe place to wait around”.
Mohsin Issa said that he was committed to “our long-term growth strategy to build an even stronger Asda”.
Sun Business comment
IF this was a wake-up call, how long has ASDA been snoozing?
The grocer has lost market share due to empty shelves, dirty stores and glitchy self-checkouts.
And with ALDI and LIDL being better-known for cheaper prices what does Asda stand for?
Mohsin Issa’s audacious ambitions of growing sales have fallen well short in the face of IT snarls.
Asda needs a no-nonsense food retailer to sort its shopkeeping issues — and there is not a moment to waste.
Deliveroo surfs up a profit
TAKEAWAY fans are treating themselves to Deliveroo meals again in the latest sign of consumer confidence returning to the economy.
It has reported a return to growth in order numbers for the first time this year.
Takeaways and dining out at restaurants are usually the first things people cut back on when feeling the pinch.
Will Shu, founder and chief executive of Deliveroo, said the figures showed a more “benign environment” after an easing-off of rampant food inflation and an “abatement of headwinds”.
Mr Shu, who has had a roller-coaster ride on the stock market since listing Deliveroo in 2021, toasted an “inflection point” for the firm after it turned a profit, boosted cash flow and rewarded investors with a £150million share buyback.
Deliveroo posted a profit of £1.3million for the first half of this year, compared with a £82.9million loss last year.
The firm has widened its business beyond restaurants, with supermarket deliveries now accounting for 14 per cent of revenues.
And it has recently ramped up deliveries from other retailers, such as B&Q, The Perfume Shop and even adult chain Ann Summers.
Last week it launched an “SPF SOS” delivery stunt with sun cream delivered by electric surfboard to Brighton beachgoers, right.
Housing repos up by a third
THE number of homes being repossessed has risen by more than a third in the past year.
Ministry of Justice figures show mortgage possession claims rose from 3,991 to 5,343 in the last quarter, while bailiff repossessions increased by 29 per cent from 660 to 854.
But the recent cut in interest rates has given housebuilder Persimmon confidence to announce it will build 10,500 homes this year, the top end of its guidance.
Meanwhile, housebuilders Barratt and Redrow have been told their £2.5billion merger is on hold.
The CMA watchdog said the buyout raises concerns in Whitchurch, Shropshire, where both firms have a high share of land. The CMA said this lack of competition could lead to higher prices and lower quality.
Euros a draw for bookies
ENTAIN, the owner of bookies Ladbrokes and Coral, scored big in the Euros thanks to a record number of draws.
There were 19 during the tournament, six of them goalless — which typically punters don’t bet as heavily on.
Entain revealed there were more goalscorer bets placed on England’s Jude Bellingham, France’s Kylian Mbappe and Spain’s Lamine Yamal than any other players in the Euros.
It helped Entain dramatically narrow its losses during the half-year to £27.6million from £448.1million a year ago.
The company is still feeling the effects of regulatory safer gambling changes which has knocked its UK online betting revenues down by 8 per cent.
However, its Euros success meant it boosted its earnings forecast to £1.09billion, the top of expectations, which lifted Entain’s shares by 5 per cent yesterday.
Hire firm layoffs
A COOLING jobs market is proving painful for recruiter Page Group, which has made more staff redundant.
A slowdown in hiring among UK companies has halved Page’s profits to £272.2million in the six months to June, while pre-tax profits have fallen by 13.1 per cent to £989million.
It follows industry figures that show businesses have cut back on permanent job placements, with large firms making redundancies and hiring fewer new starters.