Asda has reported a 10 percent slump in profits for 2017.

The supermarket chain being taken over by Sainsbury’s (LON: SBRY) revealed its worst profits since being acquired by Walmart (NYSE: WMT) in 1999.

The group blamed the fall in profits on price cuts and an overhaul of its own-brand product and admitted that performance was “behind expectations”.

“Our 2017 accounts reflect a solid performance and a strong, well-managed business,” said chief executive, Roger Burnley.

“During the year, momentum returned, driven by a series of planned investments in lowering prices, further improving quality and innovation in our own-brand ranges and providing an even better shopping experience whether in-store or online.”

Sales in the supermarket chain grew 2.6 percent to £22.2 billion. Profits fell from £791.7 million in 2016 to £712.6 million in 2017.

Asda is waiting for feedback from the competition watchdog on the proposed merger with Sainsbury’s.

If the two supermarkets were to combine, it would result in the UK’s largest retailer and overtake Tesco (LON: TSCO).

Sainsbury’s will pay Walmart almost £3 billion in cash and give it a 42 percent stake in the combined business if the deal is approved.

The deal will retain both brand names and will not result in store closures.

“Asda will continue to be Asda, but by coming together with Sainsbury’s, supported by Walmart, we can further accelerate our existing strategy and make our offer even more compelling and competitive,” said Burnley.

Asda is lagging behind Tesco, Sainsbury’s and Morrisons (LON: MRW), and is currently the worst performer of the “big four” grocers in the UK.