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Asda warns of tough year ahead as boss speaks out on horsemeat scandal Asda warns of tough year ahead as boss speaks out on horsemeat scandal
(7 months later)
Asda has warned that it expects an uncertain year ahead and does not rule out meat price increases as a result of the horsemeat scandal.Asda has warned that it expects an uncertain year ahead and does not rule out meat price increases as a result of the horsemeat scandal.
"Can I say that nothing will be passed on [to consumers]? No I can't, but our core objective would be to not pass it on," Asda's chief executive, Andy Clarke, said on Thursday."Can I say that nothing will be passed on [to consumers]? No I can't, but our core objective would be to not pass it on," Asda's chief executive, Andy Clarke, said on Thursday.
The head of Britain's second largest supermarket chain said retailers faced a challenging year in 2013. Speaking as Asda reported a 1% increase in like-for-like sales for 2012, Clarke said: "It's likely to be a challenging and uncertain year ahead and so we will continue to focus on the customer and adapt the business to their needs. By doing this I'm confident we have a strong business that can drive growth in a sustainable way."The head of Britain's second largest supermarket chain said retailers faced a challenging year in 2013. Speaking as Asda reported a 1% increase in like-for-like sales for 2012, Clarke said: "It's likely to be a challenging and uncertain year ahead and so we will continue to focus on the customer and adapt the business to their needs. By doing this I'm confident we have a strong business that can drive growth in a sustainable way."
Clarke added that Asda had taken a £100m hit to keep its Essentials range of bread, eggs, sugar and milk at the same price in order to retain cost-fixated customers. "We took a very conscious decision as an organisation … that meant that we were going to hold back inflation to grow volume."Clarke added that Asda had taken a £100m hit to keep its Essentials range of bread, eggs, sugar and milk at the same price in order to retain cost-fixated customers. "We took a very conscious decision as an organisation … that meant that we were going to hold back inflation to grow volume."
Clarke expects customers to feel the pinch even more with changes to child benefit and other welfare cuts, which he said would affect sales.Clarke expects customers to feel the pinch even more with changes to child benefit and other welfare cuts, which he said would affect sales.
While store sales remained stagnant, however, online shopping and click-and-collect services have soared. Asda's online sales increased 18.8% last year, making it the fastest growing area of the business.The company said 40% of online groceries sales were now collected in store, with 16% of online orders placed via a mobile phone. Click-and-collect has become so popular the company has opened its first collection-only depot for customers at an office site in Reading.While store sales remained stagnant, however, online shopping and click-and-collect services have soared. Asda's online sales increased 18.8% last year, making it the fastest growing area of the business.The company said 40% of online groceries sales were now collected in store, with 16% of online orders placed via a mobile phone. Click-and-collect has become so popular the company has opened its first collection-only depot for customers at an office site in Reading.
It was George from Asda clothing that outperformed the rest of the business and pushed the brand into the number three position on the high street for clothes sales behind Primark and Marks & Spencer. George from Asda now has a market share of 11%.It was George from Asda clothing that outperformed the rest of the business and pushed the brand into the number three position on the high street for clothes sales behind Primark and Marks & Spencer. George from Asda now has a market share of 11%.
Around a third of clothes sales in the UK were at a discount, while only 16% of clothes sold by George were reduced.Around a third of clothes sales in the UK were at a discount, while only 16% of clothes sold by George were reduced.
Sales of onesies were particularly popular, with 1m units sold in the past year.Sales of onesies were particularly popular, with 1m units sold in the past year.
Unveiling its results, the company focused heavily on its non-food range, as it continues to battle negative headlines relating to the horsemeat scandal.Unveiling its results, the company focused heavily on its non-food range, as it continues to battle negative headlines relating to the horsemeat scandal.
Clarke said he was shocked by the horsemeat revelations, but said he would leave "no stone unturned" in dealing with the crisis.Clarke said he was shocked by the horsemeat revelations, but said he would leave "no stone unturned" in dealing with the crisis.
He added that all 180,000 staff, including the board that oversaw the horsemeat scandal, would receive a bonus this year.He added that all 180,000 staff, including the board that oversaw the horsemeat scandal, would receive a bonus this year.
Asda's sales update was released as its parent company Wal-Mart reported a rise in profits to $5.9bn (£3.9bn) in the three months to the end of January.Asda's sales update was released as its parent company Wal-Mart reported a rise in profits to $5.9bn (£3.9bn) in the three months to the end of January.
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