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Supermarket giant Asda has seen sales fall again, but there are signs that its performance is improving.

In the final three months of 2016, sales at its stores open for more than a year fell by 2.9%.

But that was better than the 5.8% slide in the third quarter, and the 7.5% fall in sales in the three months to June.

Asda, which is owned by US retail giant Walmart, is operating in a fiercely competitive market, with discount chains Lidl and Aldi expanding rapidly.

Walmart chief executive Doug McMillon said: "In the UK, we faced some challenges this past year and we're addressing this with urgency.

"I'm glad store sales improved during the fourth quarter, but we have a lot of work to do."

Asda chief executive Sean Clarke said the supermarket had gained more than 140,000 customers in the fourth quarter.

He added that Asda had "sharpened" its prices and focused on its ranges and the availability of its products.

Mr Clarke was brought in as chief executive in July last year as part of an attempt to revive the supermarket's fortunes.

Meanwhile, Walmart reported higher-than-expected US sales after a 29% boost to online sales and with more people coming to its stores.

Sales at US stores open for at least a year rose 1.8%, beating analyst estimates of 1.3%.

Visits to its stores in the US rose 1.4%, compared with a 0.7% increase a year earlier.

"We've now seen nine consecutive quarters of traffic growth in our stores," said Walmart chief financial officer Brett Biggs. "Clearly, we're gaining traction."

Neil Saunders, managing director of GlobalData Retail, said: "While some US retailers struggled over the holiday period, Walmart did not as it notched up respectable sales gains on both a total and same-store basis."

He said promotion of its "everyday low price" strategy had paid off with "price conscious" holiday shoppers.