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Asda returns to sales growth thanks to price cuts and inflation Asda returns to sales growth thanks to price cuts and inflation
(35 minutes later)
Asda has reported its first rise in sales for three years as it said customers were responding to price cuts and store improvements.Asda has reported its first rise in sales for three years as it said customers were responding to price cuts and store improvements.
Sales, excluding petrol, rose 1.8% in the three months to the end of June partly thanks to a boost from Easter trading.Sales, excluding petrol, rose 1.8% in the three months to the end of June partly thanks to a boost from Easter trading.
A return to grocery price inflation is also likely to have helped the Walmart-owned chain, which has been struggling to cope with competition from the rapid expansion of discounters Aldi and Lidl in the UK.A return to grocery price inflation is also likely to have helped the Walmart-owned chain, which has been struggling to cope with competition from the rapid expansion of discounters Aldi and Lidl in the UK.
Asda said trading was particularly strong over Easter, with sales up 16%. Adjusting for the timing of Easter, sales at established stores were up by 0.7% on the same period last year.Asda said trading was particularly strong over Easter, with sales up 16%. Adjusting for the timing of Easter, sales at established stores were up by 0.7% on the same period last year.
The Walmart resident and chief executive, Doug McMillon, said he was “encouraged” by the UK arm’s performance. “In June, I visited Asda to see the progress being made. Customers are responding to investments in price and store experience by visiting the stores more often and increasing their basket sizes,” he said.The Walmart resident and chief executive, Doug McMillon, said he was “encouraged” by the UK arm’s performance. “In June, I visited Asda to see the progress being made. Customers are responding to investments in price and store experience by visiting the stores more often and increasing their basket sizes,” he said.
“There’s still much more to be done, but we’re clearly headed in the right direction.”“There’s still much more to be done, but we’re clearly headed in the right direction.”
The company said it had seen improvements in customer traffic and spending.The company said it had seen improvements in customer traffic and spending.
The Asda president and chief executive, Sean Clarke, said: “Our continued focus on delivering great value and service meant 275,000 new customers chose to shop at Asda in the second quarter, particularly during Easter.The Asda president and chief executive, Sean Clarke, said: “Our continued focus on delivering great value and service meant 275,000 new customers chose to shop at Asda in the second quarter, particularly during Easter.
”We will continue to work collaboratively with our suppliers to create the best products, make investments where they matter most to our customers, and ensure that we are fit for purpose in what remains a competitive market.””We will continue to work collaboratively with our suppliers to create the best products, make investments where they matter most to our customers, and ensure that we are fit for purpose in what remains a competitive market.”
The improvement in trading comes after Asda posted its worst annual figures since being taken over by Walmart in 1999, as fierce competition in the UK supermarket sector took its toll.The improvement in trading comes after Asda posted its worst annual figures since being taken over by Walmart in 1999, as fierce competition in the UK supermarket sector took its toll.
The supermarket chain admitted its performance was “behind expectations” after pre-tax profit for 2016 fell 19% to £791.7m. Accounts filed at Companies House also showed sales fell to £21.6bn from £22.3bn, as shoppers flocked to cheaper rivals.The supermarket chain admitted its performance was “behind expectations” after pre-tax profit for 2016 fell 19% to £791.7m. Accounts filed at Companies House also showed sales fell to £21.6bn from £22.3bn, as shoppers flocked to cheaper rivals.
Last week it emerged that thousands of Asda workers are facing redundancy or a dramatic cut in their working hours as Britain’s third-largest supermarket chain looks to cut costs.Last week it emerged that thousands of Asda workers are facing redundancy or a dramatic cut in their working hours as Britain’s third-largest supermarket chain looks to cut costs.
Walmart’s figures indicated that Asda’s sales rise had partly been at the expense of profits, with operating income down during the quarter.