Asda sees shoppers spend more but visit less

Stubbornly high petrol prices mean that customers are using their cars less frequently and Asda said the reduction in car use resulted in a 1.3 per cent decline in shopper numbers.

Shoppers made up for this by spending 2.6 per cent more at the till.

The Leeds-based supermarket chain, number two behind Tesco, said like-for-like sales, excluding VAT and fuel, rose by 1.3 per cent between July 1 and September 30.

This beats its 0.1 per cent growth in the first three months of the year and 0.5 per cent growth in the second three months.

Asda’s most recent performance beats both Sainsbury’s 1.0 per cent rise for the 16 weeks to October 1 and Tesco’s 0.7 per cent decline in the 13 weeks to August 27.

But it failed to beat Morrisons’ 2.4 per cent increase for the 13 weeks to October 30.

Asda, which was trailing its rivals for most of last year, has fought back with its new price guarantee campaign, which promises to be 10 per cent cheaper than its competitors on a comparable basket.

The supermarket chain said that over 13 million baskets have been checked online by customers this year.

Once customers have logged on the first time, subsequent price checks take less than a minute and give shoppers a discount off their next visit.

Asda has also benefited from its purchase of 147 smaller format Netto stores, bringing its store total to 528.

It said it will complete the conversion of the Netto stores next week.

Asda said the Netto programme has been delivered on time and on budget and converted stores have attracted 500,000 new customers since the first store opened in Wakefield in May.

The grocer has also seen a benefit from the relaunch of its own-brand food range under the ‘Chosen by You’ banner, which has gone down well with customers.

Asda has plans to extend its private brand ranges and its premium ‘Extra Special’ range is now backed by leading cookery school Leiths.

Last month Asda said it would slash the cost of 3,000 products in addition to its Asda Price Guarantee.

It has cut prices on items such as bread, butter, cereal, cupboard essentials, toilet tissue, laundry powder and fruit, including the lowest-priced bananas at 52p per kilo.

The campaign followed a similar move by Tesco, which also cut the prices of 3,000 everyday items. Tesco announced a £500m investment in lower prices in September in a bid to lure shoppers and stem market share losses

As the supermarket sector enters what is traditionally a heavily promotional Christmas period, data from market researcher Kantar Worldpanel last week showed Asda growing faster than the overall grocery market for the first time since early 2010.

Shoppers are having to cope with austere times as they cope with job losses, pay freezes, Government austerity measures and high petrol prices.

The decline in car journeys has been well documented as consumers try to save money by filling their petrol tanks less often.

Helen Dickinson, head of retail at KPMG, said: “The cost of petrol and household utilities will continue to be the biggest contributors to the squeeze on personal disposal incomes.

“This squeeze will continue to affect retail spending which has remained largely subdued even as we enter the peak trading period of the year, Christmas.”

The British Retail Consortium said last week a fall in October sales from stores open more than a year augured badly for Christmas trading.

Asda also said it is on track to deliver £800m in savings by 2020 through sustainability initiatives.

Wal-Mart’s international division, which includes Asda, reported a 20.3 per cent increase in net sales including fuel to £20.4bn in the three months to October 31.

Doug McMillon, president and chief executive of Wal-Mart International, said: “The UK grocery market is entering into what is traditionally a heavy promotional period in time for Christmas.

“Asda, however, continues with a very simple promise to customers – our prices are 10 per cent cheaper than the competition on comparable baskets, or we’ll give you the difference.”

Asda’s third-quarter data was released as parent group Wal-Mart posted quarterly profit growth below expectations, as the economy weighed on customers in the US.

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