Asda has reported a fall in sales during its first quarter thanks to the ongoing cost of living crisis .
The Big 4 grocer said in the three months to 31 March, sales slid by 9.2%, with like-for-like sales dropping by 7% compared to the same period last year.
Clothing and general merchandise sales also dropped by 19.3% and 23.7% respectively.
During the period, Asda said households were “squeezed by he removal of Ofgem’s price cap, resulting in gas price inflation of 95% and electricity prices rising by 53% in April”.
The grocer’s Income Tracker also recorded an average fall in income to £205 per week, the lowest figure since October 2018.
Asda co-owner Mohsin Issa said: “The latest Asda Income Tracker highlights the stark reality facing millions of families in the UK right now with household incomes more squeezed than ever.
“Asda has a strong heritage of investing in price and customers can trust us to be on their side when they need it the most.
“We are investing in helping our shoppers manage the challenges of the here and now, as well as progressing critical strategic initiatives including loyalty, convenience and enhancing our in-store offering, which will all deliver long-term value.”
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As a result, the chair of Big 4 grocer warned customers are buying less products and turning to cheaper alternatives following a drop in household incomes.
Lord Stuart Rose said customers are now “making desperate decisions about spending” as the cost-of-living crisis continues.
According to Rose, customers are “saying they can only spend £40 in a shop and will put anything back if it comes over that”. He added that he could not predict the future for inflation but warned customers should not expect an imminent improvement.
Rose added: “I can’t predict how long this cost inflation will continue for but it is not suddenly going to disappear”.
“I think there will be a levelling off at some point but we are seeing wheat prices still increasing dramatically, oil prices rising, butter too.”
The former M&S boss added that product availability in some stores has been “patchy” as it continues to tackle supply chain issues stemmed from the invasion of Ukraine and the Covid-19 pandemic.
In the three month period £90 million was invested to expand Asda’s Just Essentials value range, dropping the prices of 100 household items until the end of the year, in a bid to help families deal with the cost of living crisis.
During the period, the grocer also announced an increase in hourly pay for shopfloor employees from £9.66 to £10.10 per hour from July of this year.
The news comes as Asda waived the qualifying colleague discount and reinstated its offer of 10% off in stores to Blue Light Card holders.
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