Financial News

  • 15 August 2014, 9:38

Asda Grows Sales In Battle With Discounters

Asda has confirmed small growth in sales during its last financial period as the UK's major supermarket chains battle the challenge from hard discounters.

The company, which reported only a sales figure in its financial update for the 10 weeks to June 30, said like-for-like sales grew 0.5% in the period when the effects of fuel sales were excluded.

In a briefing in London, the chain's chief executive Andy Clarke added that the sales performance - coupled with year-on-year market share growth - was achieved despite continuing challenging trading conditions.

He credited the firm's attempts to "re-define value retailing", saying Asda had been quick to identify the structural changes taking place in the UK market.

He said: "The last quarter has seen unprecedented change within the food retail sector, and whilst I do not underestimate the challenge currently presenting retailers, I am proud that our business identified and put plans in place to respond to these changes early.

"We have a clear five-year strategy based on Everyday Low Prices and we continue to implement that strategy with agility and pace". 

Asda, along with its bigger rival Tesco, Sainsbury's and Morrisons, have been facing down threats to their customer base from the likes of Aldi and Lidl which have capitalised on the squeeze on living standards during recent times to grow their businesses at the expense of margins.

While Asda and Sainsbury's have been the most resilient in the battle for market share, Morrisons and Tesco have both endured declines.

The intensity of Tesco's woes, which resulted in a series of profits warnings, forced the departure of chief executive Phillip Clarke who will be replaced from October.

Asda said its progress during the latest period included its George clothing offering becoming the second largest clothing retailer by volume in the UK.

The supermarket chain's parent, Walmart, saw its shares rise in pre-market trade in New York.

The Group posted a slight rise in profit for its fiscal second quarter despite the world's largest retailer struggling with weak like-for-like sales.

Profits for the quarter ended July 31 were $4.09bn, up 0.6%.

Revenue beat expectations at almost $120bn.

Advertisement