Asda celebrates another quarter of growth

Asda has reported its fifth consecutive quarter of positive sales growth, although the timing of Easter reined back the speed of growth.

The Leeds-based grocer, which is proposing a £12bn merger with Sainsbury’s, said like-for-like sales rose 0.4 per cent in the three months to June 30.

This marks a slowdown from the 3.4 per cent growth reported in the first three months of the year, which Asda put down to the early timing of Easter. This boosted the first quarter, but meant it did not benefit in the second. Asda said that if the timing of Easter was removed, like-for-like sales in the quarter rose 2.6 per cent.

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Dewsbury-born Roger Burnley, who took the helm as Asda’s president and CEO in January, said: “Our second quarter performance shows continued momentum for 2018 and this is the first quarter we have outperformed the market since 2014.

“We remain focused on delivering our strategic priorities and investing in the areas that matter most to our customers - innovation in our own brand, lowering prices and in continuously improving our shopping experience both in store and online.”

Mr Burnley said Asda welcomed an additional 285,000 customers to its stores over the quarter and grew online sales by 13.2 per cent.

“I am grateful to our colleagues for all their hard work,” he added.

“Whilst we’ll never be complacent I am pleased that we continue to work hard to do the right things for our customers, and are focused on providing the best possible shopping experience as we head into the second half of the year.”

Mr Burnley has been leading a turnaround at Asda in an attempt to improve sales amid a long-running supermarket price war.

Asda said targeted price cuts helped improve its performance, adding that better food sales volumes and a strengthening performance in non-food categories also gave it a boost.

Net sales rose 2.4 per cent over the quarter while the supermarket also saw its gross profit rate increase, supported by better margins in non-food.

Walmart‘s president and CEO Doug McMillon said: “In the UK, comp sales were positive for the fifth consecutive quarter.

“We’re focused on improving the experience in our stores and providing great value for customers through lower prices, especially within our private label offerings.”

Asda did not give an update on its £12bn merger with rival Sainsbury’s. The pair have previously said the deal will produce £500m in cost savings.

Consumers have also been promised cheaper everyday items, although it is not yet known where the price cuts will fall.

The Competition and Markets Authority is scrutinising the deal and it is expected that scores of stores will have to be offloaded as part of the competition review.

The latest Kantar Worldpanel statistics showed that Asda was the best performing of the big four retailers for the first time since December 2014, as football fever combined with sunny weather boosted overall supermarket sales by 3.6 per cent, the fastest rate of growth this year.

Asda beat the overall grocery sector with growth of 3.7 per cent over the 12 weeks to July 15 to post its strongest growth in more than five years, according to Kantar Worldpanel.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Asda is concentrating very much on its own label business. Standard own label is doing well. Asda has recognised the need to invest in its own products.”

Asda’s core, standard own-label lines, which make up 40 per cent of its sales, saw a 9 per cent sales increase.

“Asda has the highest basket spend of any retailer at £26,” said Mr McKevitt.