Published On: Sun, Aug 13th, 2017

Asda UK: Turnaround strategy for struggling supermarket eats into Walmart profits

Walmart’s net profits are forecast to be down 14.3 per cent to $3.3billion (£2.5billion), due in part to Asda being forced to cut its prices to rebuild its sales and market share in the wake of fierce competition from discounters Aldi and Lidl, as well as the recovery at rivals WM Morrison and Tesco

Walmart’s profits are also thought to have been hit by foreign exchange fluctuations affecting its overseas earnings. 

Wall Street analysts believe that Walmart’s second-quarter revenues will come in 1.7 per cent higher at £94.7billion. 

Last year Walmart parachuted Sean Clarke into Asda as chief executive to spearhead its turnaround, to halt the slide in market share, sales and profits that started under predecessor Andy Clarke. 

In May, Asda reported its 11th consecutive quarter of falling sales.

Asda’s full year pre-tax profits fell 18.2 per cent to £791.7million, while revenues were 3.2 per cent lower at £21.7billion. 

Additionally, its like-forlike sales fell by 5.7 per cent over the course of 2016, while its market share fell 0.9 per cent to 15.7 per cent.

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