Asda reports flat sales

Asda yesterday revealed sales in the third quarter were "essentially flat". The group's owner, the United States' Wal-Mart, also admitted that Asda had failed to meet expectations in the three-month period to end-October, when its market share had also failed to improve.

Mike Duke, head of international operations, said: "Asda sales and profits fell short of plan for the quarter; the UK market continues to be very competitive and challenging." "Total sales grew in the "mid-single digits" if petrol sales are included and in the "low single digits" if not. "Comparable store sales and market share in the quarter were essentially flat," Wal-Mart said.

David Stoddard, retail analyst at the stock broker Teather & Greenwood, said: "This is a continuation of the position Asda has been in. One of [new chief executive] Andy Bond's targets is to put it right. It doesn't change over night. Asda is not achieving what it needs to be a strong number two," he said.

Some analysts believe that Asda was slow to react to British planning laws while Tesco was quick to capitalise on them by using different formats - from large superstores to small convenience stores - to continue growth. Lee Scott, chief of Wal-Mart, has called on the government to force an inquiry into Tesco's dominance, as has Sainsbury 's chief executive, Justin King, while last week John Bridgeman, the former boss of the Office of Fair Trading, called for a new investigation into the way supermarkets dominate food retailing in Britain.

Asda is entering its most critical trading period. It hopes to outpace Sainsbury's, particularly in the run-up to Christmas, as it is aimed at bulk-buying and has a wide range of non-food items such as toys aimed at the festive buyer.

An Asda spokesman said yesterday: "Our overall sales are still growing, and with seven new stores opening this week alone - equivalent to 25% of our total new sales space this year - we're working hard to ensure we have a good Christmas. We have high expectations. And there is no doubt that our performance this year has not hit the heights we've set in previous years. Nevertheless, most of our competitors would be chuffed to bits in the current climate to have our numbers."