Asda has said it will focus on improving customer experience following a drop in sales.

In a second quarter trading update, the supermarket said like for like sales (LFL) decreased by 5.3 per cent.

Total revenue excluding fuel declined by 2.2 per cent to £5.3 billion over the three months to the end of June.

In the first half of 2024, Asda said that total revenue grew by two percent while LFL sales dropped by 2.1 per cent.

Online grocery sales account for 18 per cent of Asda’s total food revenue, growing by 1.4 per cent over the quarter.

Meanwhile, Asda’s fashion range George saw online revenues grow by 3.9 per cent. However, total clothing sales dropped by 3.9 per cent on a LFL basis. Asda attributed this to its decision not to participate in “significant promotional activity” across the fashion sector.

The supermarket said its back-to-school range had seen a “record start” with sales jumping 88 per cent over the first two weeks of the launch of the campaign compared with the same period of last year and sales increasing by 13.5 per cent by the end of the second quarter.

The drop in sales coincides with what the retailer describes as the largest transformation in its history, with the number of Asda stores growing from around 600 in June 2021 to 1,200 this year.

Additionally, Asda is undergoing Project Future, which it claims is Europe’s largest IT transformation project. It includes changes to 2,500 systems across every part of Asda’s business to deliver a cloud-based infrastructure and improve Asda’s data capabilities.

Asda said it will focus on customer satisfaction, enhanced product availability and a renewed trading plan over the rest of the year.

“We continue to make progress by investing in bringing our quality and value offering to more customers across the UK, with Asda’s food price inflation trending lower than the market,” said Michael Gleeson, chief financial officer at Asda. “However, we also know that there are some areas where we can and need to improve.

“We have today set out clear and decisive action to deliver a more consistent customer experience – to match the uncompromising value we offer. We remain confident in the underlying strength of the Asda business as we execute our long-term growth strategy.”

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