UPMARKET shoppers are flocking to Asda in an attempt to reduce their weekly shopping costs as the economic downturn starts to impact on the middle classes.
Leeds-based Asda has always had a strong following among blue collar workers, but Asda finance chief Judith McKenna said that over the past few months the group has seen a big increase in wealthy shoppers.
"One of our strongest growth areas over t
he last three months has been in AB shoppers," she said, referring to the wealthiest socio-economic group.
"We're still not seeing any evidence of us losing to discounters," she added.
Ms McKenna declined to say which supermarkets Asda is stealing those wealthy shoppers from, but she pointed to recent data from researchers which shows that Tesco and J Sainsbury is lagging Asda. Upmarket stores Waitrose and Marks & Spencer have fallen even further behind.
Asda, Britain's second-biggest supermarket group, said it was seeing no sign of its traditional customers defecting to discounters such as Aldi, Lidl and Netto.
Ms McKenna said Asda had no plans to launch a discount range of brands similar to those introduced by market leader Tesco in September. Tesco is keen to claw back some of the sales it has lost to the discounters.
Instead Asda, which is owned by US retail giant Wal-Mart, has stepped up its Smartprice offering. "More customers are buying Smartprice rice, pasta, biscuits and other staple basic foods," she said.
"There is a return to people cooking at home. We have definitely seen an increase in joints of meat as people cook a roast on a Sunday, eat leftovers on Monday and make a soup from the rest for later in the week."
She was speaking yesterday as Asda reported a 6.9 per cent rise in underlying third-quarter sales and said profits were growing ahead of plan.
The group is benefiting from rising numbers of customers and a higher average spend per shop.
Asda said the rise in like-for-like sales, excluding fuel, in the three months to September 30 were an improvement on increases of 6 per cent in the second quarter and 5 per cent in the first.
Market leader Tesco reported a 4 per cent rise in like-for-like sales excluding fuel for the 13 weeks to August 23, while Sainsbury's, Britain's third-biggest grocer, posted a 4.3 per cent increase for the 16 weeks to October 4.
Ms McKenna said Christmas would be highly competitive for supermarkets and customers would be "very value oriented."
"Christmas will be tougher for customers and they will manage budgets carefully, but we're well-placed for the Christmas period," she said.
"Strong sales over Halloween show that customers are prepared to buy into events.
"We're offering customers deals such as 50 Christmas tree baubles for £5."
Asda will reveal its festive TV campaign this weekend and Ms McKenna confirmed that the group has ditched the celebrities this year. "There won't be any celebrities, we'd rather put the money into our customers' pockets," she said.
Data from researchers TNS WorldPanel earlier this week showed Asda growing sales at twice the pace of the broader grocery market in Britain, giving it a market share of 17.1 per cent.
Wal-Mart, the world's biggest retailer, reported better-than-expected quarterly profit, but trimmed its full-year earnings forecast, blaming rapid exchange rate movements.
Asda did not provide figures for its profit performance.
Winners and Losers Asda is gaining market share as cash-strapped shoppers respond to its reputation for low prices, while growth at market leader Tesco is lagging behind.
Data from market researcher Nielsen shows Asda grew sales by 8.7 per cent in the 12 weeks to November 1, lifting its market share to 15.6 per cent from 14.9 per cent in the same period last year.
Sales growth at Tesco lagged the market at 4 per cent, despite its launch in September of a new range of low cost products and a marketing campaign under the banner 'Britain's Biggest Discounter'.
Bradford-based Wm Morrison was another winner with sales up 9.1 per cent while Iceland enjoyed growth of 13.7 per cent.
Marks & Spencer was the only one in negative territory with sales slipping by 0.7 per cent.
Number three player J Sainsbury saw sales growth of 3.4 per cent, while upmarket supermarket Waitrose struggled with growth of just 0.3 per cent.
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