Asda's Christmas sales hit by 'cautious' spending

Asda has said customers were "cautious" over the Christmas period as it revealed that its sales fell in the final three months of last year.

The supermarket chain's like-for-like sales, which excludes money taken at the tills of new stores, were 1.3% lower than the year before.

"Whilst customers were enthusiastic for Christmas, they were more mindful in their spending," said Asda boss Roger Burnley.

Other supermarkets also saw sales slip.

Sales at rival Sainsbury's fell by 0.7% over a similar period, while Tesco saw a 0.2% decline and Morrisons recorded a 1.7% drop in sales.

"We know that our customers' mind sets during the quarter were cautious," Mr Burnley said.

He said many Christmas shoppers chose to pare back their gift lists and focus on buying presents for children rather than adults and extended family.

Asda identified the clothing market as being particularly challenging, however it did not publish clothing sales.

The challenging Christmas period rounded off a difficult year for Asda, which had a planned merger with rival Sainsbury's thwarted by the UK's competition watchdog.

The supermarket chain also came in for criticism after it threatened to fire thousands of staff unless they signed a new contract that scrapped a number of employee benefits in return for a small increase in hourly wages.

"As ever, I am hugely grateful to our colleagues for their efforts for our customers this quarter," Mr Burnley said, adding that Asda would pay a bonus to eligible staff later this month.

Meanwhile, US retail giant Walmart, which owns Asda, reported overall lower than expected growth over the festive season, adding to a series of disappointing results from US retailers such as Target, Macy's and home decor chain Pier 1, which has entered bankruptcy proceedings.

Walmart said revenue in the quarter increased 2.1% from last year, while sales at stores open for at least a year were up just 1.9%, excluding petrol.

While the new year had started off well, "sales leading up to Christmas in our US stores were a little softer than expected", said Walmart chief executive Doug McMillon.