Asda back on track after horsemeat scandal

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Asda said its sales are back on track following the horsemeat scandal.

The Leeds-based supermarket chain, which alongside Tesco was found to have unknowingly sold horsemeat earlier this year, said its rigorous testing programme is helping it to win back customer trust.

Asda’s chief executive Andy Clarke said: “Trust was dented and trust is returning. There was a marginal sales impact initially and we’ve seen that recover. We’re back to where we were.”

He said the group has broadened its “incredibly robust” testing programme to prevent any repetition of the scandal.

He was speaking yesterday as Asda announced a 1.3 percent rise in first quarter underlying sales during the 14 weeks to April 12 thanks to a £100m investment in price reductions.

This was an improvement on the 0.1 per cent increase in the fourth quarter of the previous financial year.

The group said that customers are finding the economic environment “incredibly challenging”.

“There are a few signs of green shoots, but if you’re a family, you’re still under incredible pressure,” said Mr Clarke.

Asda has been investing more in 50p and £1 lines and lowering prices on essentials.

“We’re the biggest pound shop in Britain,” said Mr Clarke.

“This represents a strong performance in what remains a very tough market.

“Despite a difficult environment for our customers, we have continued to achieve growth on growth by lowering the prices of essentials and investing in technology to make shopping more convenient.”

Online sales grew strongly over the quarter, up by over 16 per cent.

However the group’s market share remained unchanged at 17.9 per cent and analysts expect number three player Sainsbury’s to take Asda’s number two spot around the middle of next year.

Tesco remains the market leader with Bradford-based Morrisons trailing in fourth place.

Last week Morrisons reported a 1.8 per cent fall in first quarter like-for-like sales.

The group has been hit by its lack of an online offering and a relatively small number of convenience stores.

Unlike its rivals, Asda has not introduced money-off vouchers, preferring to stick to its “everyday low pricing”.

“We’ve always been and will continue to be number one for unbeatable value,” said Mr Clarke.

“Low prices are who we are and are what drive real loyalty. They are not just a gimmick or an unsustainable or knee-jerk promotion.

“We are unwavering in this commitment to low prices and will continue to invest to allow our customers to shop when, where and how they want safe in the knowledge that they will always get the best prices when they shop with Asda.”

Asda said it is on course to be named Britain’s lowest priced supermarket for the 16th year running by trade magazine The Grocer.