Walmart's U.K. Division Continues to Decline - TheStreet

Walmart's (WMT) - Get Report U.K. division was the only supermarket to see declines in the 12 weeks to Feb. 26, supermarket industry data indicated Tuesday, as it continues its downward trajectory in a fiercely competitive market.

Asda, as Walmart is known in the U.K., saw sales fall 0.8% in the 12-week period compared with last week, Kantar Worldpanel said on Tuesday. Its market share fell to 15.7% from 16.2%.

A decline of 0.8% shows improvement for the beleaguered grocery store, making its best performance since November 2014.

Asda in February was voted the worst supermarket in the U.K., according to consumer advocacy magazine Which?.

Shoppers dislike for Asda is translating into shrinking sales and market share.

Asda, which has more than 600 stores across the U.K., was Walmart's worst-performing division by far in the fourth quarter of last year, as same-store sales fell 2.9%, with declines in both store traffic and average ticket. Asda's sales fell 5.8% in the third quarter, dropped 7.5% in the second quarter and declined 5.7% in the first quarter.

Low-cost retailers continue to put pressure on the U.K. big four supermarket - Tesco (TSCDY) , Sainsbury's (JSAIY) , Asda and Morrisons (MRWSY) . Privately held German discounter Lidl saw the biggest sales growth, at 13%, in the 12 weeks to Feb. 26. Its market share jumped to 4.6%, compared with 4.2% last year.

Meanwhile, privately owned German retailer Aldi saw sales grow by 12.9% in the 12 weeks with market share up to 6.3%.

Tesco and Sainsburys saw marginal sales increase at 0.6% and 0.3% respectively. Both supermarket giants saw market share fall, with Tesco down 0.5 percentage point to 27.9% and Sainsbury's losing 0.3 percentage points to 16.5%.

Tesco shares were down 1.38% at 9:30am GMT on Tuesday, to change hands at 187.68 pence. Sainbury's was marginally up 0.07% at 260.37 pence.

Britain's No. 4 grocery chain Morrisons clocked up the biggest rise in sales of the big four, with a 2.6% increase.

Morrisons shares lost 0.85% in London to change hands at 244.90 pence. The FTSE 350 Food & Drugs Retailers Index has lost 2.69% over the past three months.

"Combined sales at the U.K.'s four largest supermarkets increased by 0.5% year on year," Kantar Worldpanel Head of Retail and Consumer Insight Fraser McKevitt said in a statement. "This is a timely reminder that despite the huge interest in the discounters during recent years the big four remain a force to be reckoned with: they still hold just over 70% of the market, with almost 99% of the population shopping in a Tesco, Sainsbury's, Asda or Morrisons during the latest quarter."

Walmart is throwing its weight behind Asda in a bid to curb the declines. Walmart in February said it will ensure Asda, which has 630 locations across the U.K., leverages its parent's purchasing strength, allowing it to buy everything from refrigerators to own-brand products to real estate for a cheaper price driving down costs, Walmart's chief administration officer, Scott Price, told Reuters.

Walmart shares closed at $69.88 in New York Monday, falling 0.21% on the session to extend the three-month to decline to 0.68%.