Walmart's (WMT) U.K. division, Asda, has for the second year in a row decided to not have Black Friday sales. But can the ailing 'Big Four' retailer afford this strategy?
Asda has been Walmart's worst-performing division for several months, indicating only last week that U.K. sales were down 5.8% in the third-quarter compared with the same time last year. Sales in the second-quarter of this year were down more than 7% at Asda.
An Asda store in the central London district of Clapham was empty of customers, pictured, and sales at 7:00 am GMT (2:00 am New York time) Friday, with the only sale items on display being half-price toys, an ongoing promotion not linked to any Black Friday event.
A fierce price war is underway in the U.K. supermarket sector as low-cost competitors Aldi and Lidl threaten the so-called "Big Four" supermarkets - Tesco (TSCDY) , Sainbury's (JSAIY) , Asda and Morrisons (MRWSY) .
And Asda is losing the battle. Data released by Kantar Worldpanel last week show Asda suffered another embarrassing slip, with market share down to 15.5% from 16.4% last year for the 12 weeks ended Nov. 12, putting it firmly in third position.
Tesco has a tight grip on the No. 1 spot, with 28.2% market share, Sainsbury comes in second at 16.3%. Fourth-ranked Morrisons has 10.5%.
Competitors Tesco and Sainsbury's fully embraced the American tradition online and in stores, offering sales on a range on items from televisions to Dyson vacuum cleaners.
The irony is that Walmart, through Asda, introduced Black Friday to the U.K. in 2013. After, skirmishes over sales in both 2013 and 2014 the company decided to do away with it in 2015.
"Feedback from our customers was clear that they didn't want the pressure of a 'flash sale' and preferred to know we were offering low prices throughout the festive season," an Asda spokesman said in a statement.
Sainbury's owned Argos, a variety catalog store, reported a surge in online visitors in the early hours, with half a million visitors looking for its deals in the first hours of trading, CEO John Rogers today the BBC's Today Programme this morning. This was a 50% increase on last year
Rogers predicted that the store would take 70% of its orders online today, compared with 50% on a normal trading day.
Brian Sozzi in New York reported that Walmart's sales were focusing on children's toys, with stores opening at 7:00 am on Thanksgiving day.
Data from Experian show that sales over the Black Friday weekend from the Thursday to the Monday netted more than £3 billion ($3.73 billion).
It is expected that £5.5 billion will be spent this year from Thursday Nov. 24 to Monday Nov. 28, according to consultancy firm Salmon, an Accenture company.