Shoppers get prepared for a lockdown Christmas - Ros Snowdon
The Leeds-based firm said it is gearing up for a “very different Christmas”, with customers starting their preparations earlier than normal and buying smaller turkeys.
This follows numerous reports of families getting supermarket deliveries that bear little relevance to what they ordered. No-one wants to be left with a festive delivery that fails to include the Christmas turkey, figgy pudding or mince pies and so shoppers are loading up their freezers for a fail-safe Christmas.
Asda said sales of frozen turkey crowns, which typically serve three or four people, have surged 230 per cent year-on-year. This indicates that many people are preparing for a lockdown Christmas with just their immediate family despite reports that bigger gatherings will be allowed over a five day festive period.
Asda said recent trading was boosted by strong sales of Christmas items. Sales of Christmas trees have risen by 83 per cent year-on-year, while festive lights are up 57 per cent, Christmas puddings are up 71 per cent and mince pies are up 44 per cent.
Asda reported a marked shift in buying patterns with customers stocking up their freezers and cupboards with festive essentials earlier than ever before, which suggests they are getting used to expecting the unexpected, but preparing to enjoy themselves as much as possible.
It comes after a bumper year for supermarket chains, which have seen strong sales after remaining open throughout lockdown restrictions due to their essential status. They have also benefited from a business rates holiday for the current financial year, although Asda said that the significant costs related to Covid-19 have exceeded its tax break this year.
Asda said like-for-like sales over the three months to September 30 rose 2.7 per cent, buoyed by strong online growth during the pandemic. Sales through Asda.com and George.com increased by 72 per cent for the quarter against the same period last year. This week, Asda won the award for ‘Online Supermarket of the Year’ at the 2020 Grocer Gold Awards.
It comes a month after the supermarket chain agreed to be taken over by petrol forecourt firm EG Group and private equity firm TDR Capital in a £6.8bn deal which is expected to complete next year.
Thomas Brereton, senior retail analyst at GlobalData, said Asda’s “monotonous” third quarter results expose why the supermarket needs incoming new owners Issa brothers and TDR Capital to bring in a fresh view.
He claimed that the 2.7 per cent rise in like-for-like sales and 72 per cent sales increase across Asda.com and George.com is, relative to likes of Tesco and Sainsbury’s, “mediocre”.
He said that Asda’s actions over the last quarter, such as unveiling a new sustainability store and removing plastic fruit and veg bags from stores, are simply following what other supermarkets are doing (or did a year ago), “as if Asda has cobbled together a strategy based on actions of its rivals, rather than assessing its own position in the market and how best to change to meet consumer demands”.
On a brighter note, Mr Brereton said there is hope that, under the new owners, Asda will receive the attention that it needs to compete with competitors that are moving towards an EDLP (every day low prices) strategy and with the expanding discounters. This includes a promise of £1bn investment over the next three years.
There has been speculation that Asda’s new owners could use their petrol forecourts to roll out a nationwide Asda convenience store operation.
The Issa brothers have confirmed that they will invest in expanding Asda’s convenience operations, but it is not yet clear how they will do this.
It seems a no-brainer that the Issa brothers should turn their 400-strong petrol forecourt estate into 400 mini Asdas.
This would solve Asda’s lack of convenience stores and give the Issas access to Asda’s lower prices.