At a time when its rivals are taking a major hit to profits in a bid to maintain sales, Leeds-based Asda said its operating profits rose two per cent to £1.012bn in 2014, up from £994m.
At the pre-tax level they rose 0.7 per cent to £920.6m. The group paid corporation tax of £172.9 million in the year to December 31.
Asda’s revenues fell 0.4 per cent to £23.2bn and like-for-like sales were down 1.0 per cent.
In April this year the group said like-for-like sales fell 4.7 per cent in the 11 weeks to June 30 after it decided that it would rather lose sales in order to maintain profits.
Asda’s chief executive Andy Clarke has criticised rivals for issuing coupons and money off vouchers, which he described as “quantitative easing”.
He believes that “sales are for vanity, profits are for sanity” and bosses at Asda’s parent company Wal-Mart appear happy to ignore sales if profits can be maintained.
In accounts filed to Companies House, Asda said the trading environment was challenging although customers had more money in their pockets as a result of improved employment levels and deflation in food and fuel prices.
The Asda income tracker for 2014 showed that customers had £180 to spend on non-essentials each week, up by £15 a week on 2013.
The firm said it maintained its price leadership over other supermarket peers and invested a further £300m in the price of everyday essentials such as bread, milk and butter.
It has won The Grocer’s lowest priced supermarket award for 17 successive years. In 2014 it launched George Home with a range of over 4,500 products.