Online shopping at a ‘tipping point’ as Asda sees sales soar

Andy Clarke
Andy Clarke
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ASDA said online retailing has reached a “tipping point” this Christmas, as increasing numbers of customers shop on their smartphones and tablet PCs.

The UK’s second-biggest supermarket said all its online home delivery slots in the run up to Christmas are fully booked, and this year online sales peaked later in December.

The Leeds-based retailer yesterday predicted another tough Christmas for shoppers, who are struggling with higher utility bills and the rising cost of fuel.

“It’s still pretty challenging for families,” said chief executive Andy Clarke. “Disposable income is what really counts for the family. This Christmas and as we move into next year won’t reflect anything different. All the data we have shows the customer feeling pretty challenged.

“Fuel and food are the two big messages as we move through Christmas and into next year.”

Asda, which monitors customers’ spending power through its Income Tracker, said customers are £1 a week better off than a year ago, but £12 a week worse off than two years ago.

Multi-channel director Jon Wragg said two years ago less than five per cent of its online sales came through mobile and tablet devices. Now mobile accounts for almost a quarter of online sales, aided by an app for smartphones developed by its US parent company Wal-Mart.

“We continue to be really interested by the pace of change in this area – one through mobile and the other through click and collect,” said Mr Wragg.

“We’ve seen a bit of a sea change, a bit of a tipping point this season. We are seeing significant growth.

“They are using the app to order groceries in what would otherwise be dead time for them.

“Most of the growth in retail is going to come in e-commerce.”

Thirty per cent of new registrations for online grocery shopping are through its mobile app.

Mr Wragg said while online sales peaked earlier in December last year, this year they peaked on December 17, as people become more comfortable with shopping online.

Asda now has free WiFi internet in 300 of its stores, and said all its 564 stores will be wirelessly connected by the end of March.

“We see that as part of accelerating our multi-channel journey,” said Mr Wragg. He added while some retailers are cautious about customers checking store and online prices, “we want customers to compare our prices when they are in store”.

As well as home shopping, the retailer offers click and collect – where goods are ordered online and picked up from the store. “Click and collect will really come into its own this Christmas,” said Mr Wragg.

Asda is also launching a third ‘dark store’ in Nottingham, where staff, not shoppers, pick goods from shelves for customers.

Despite inflationary pressure, Asda has committed not to raise the price of a core basket of goods including eggs, flour, bread, milk and minced beef.

Figures this week showed inflation remains stubbornly high at 2.7 per cent, with a fall in petrol prices not enough to outweigh higher costs for power and food.

“We are incredibly committed to EDLP (every day low prices),” said Mr Clarke. “Our model drives us to look hard at ourselves before we look elsewhere. We know that we have the lowest cost business in the industry. That allows us to make that appropriate price investment decision.”

Mr Clarke insisted the chain continues to grow, despite Kantar data showing its market share slipping to 17.3 per cent from 17.4 in the 12 weeks to November 25. “We are serving more customers than we were a year ago, whether through new space, organic growth or online,” he said.

The retailer said big sellers this Christmas include the ‘onesie’ – an all-in-one body suit. It has sold 860,000, and expects to sell more than 1m. Asda also plans to expand its tie-up with Disney, after successfully piloting a Disney section in three of its stores.

Fears grow on the high street

WEAKER-than-expected retail sales so far this month have fuelled concerns over spending during the peak Christmas trading period.

A Confederation of British Industry distributive trades survey showed the sales balance fell to +19 from a five-month high of +33 hit in November. Analysts had forecast a smaller decline to +25.

“This month’s survey hasn’t quite provided the Christmas cheer that retailers anticipated, with sales growth falling short of expectations,” said Anna Leach, CBI head of economic analysis.

“Clearly weak spending power and uncertainty over the economic outlook are likely to remain key risks to the retail sector in 2013.”

Grocers and furniture retailers fared well, while retailers of household durable goods were among the worst-performing.

The expected sales balance for January eased to +10 from +25 for December.

The high street has seen a number of retail failures in recent years, including electricals chain Comet which closed its doors for the last time on Tuesday.

“This is particularly worrying news for retailers and it