Asda grows year-on-year sales for the first time since 2014

Asda has increased year-on-year sales for the first time since October 2014, after getting more shoppers through its doors and growing online.

Despite adding more than 250,000 additional shoppers and putting in a strong performance online, its overall share fell by 0.4 percentage points to 15.6%, according to analysts at Kantar Worldpanel.

Similarly, though rival Yorkshire supermarket Morrisons remained the fastest growing of the Big Four, its total market share slipped 0.2 percentage points to 10.4%, growing behind the rest of the market.

Premium own-brand lavels are continuing to grow, including Morrisons’ The Best range. The Bradford-headquartered supermarket announced in Q1 trading today that in the 13 weeks to 30 April, like-for-like sales excluding fuel were up 3.4%, despite inflation due to a weaker sterling.

David Potts, chief executive, said:  “Our new financial year has started well, thanks once again to the dedication of our team of food makers and shopkeepers. We are improving the shopping trip in many different ways, which is making Morrisons more popular and accessible for customers. These new initiatives in-store, online, in wholesale and services are beginning to build a broader, stronger Morrisons.

 “We are confident we will continue to turnaround and grow Morrisons. Our expectations and guidance for 2017/18 are unchanged, including year-end net debt of less than £1bn.”

Analysts at Retail Remedy said that Morrisons could “stand tall” following its results, and that it was evident that the chain had “upped its game” with a retail offering further resembling M&S.

John Ibbotson, director of the retail consultancy Retail Vision commented: “A year ago such a stunning turnaround seemed improbable at best, a fantasy at worst.

“As the smallest of the Big Four, and with a low price model that put it perilously close to the discounters’ territory, Morrisons had everything to lose from the Aldi and Lidl insurgency.

“But Dave Potts’ dogged, back-to-basics approach has transformed Morrisons’ fortunes – with its 3.4% surge in like-for-like sales easily making it the fastest growing of the Big Four.”

Figures from Kantar for the 12 weeks ending 23 April 2017 revealed the overall market has grown by 3.7% – the fastest rate since September 2013 and worth almost £1bn in additional sales to the grocery sector.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, commented: “All 10 major retailers are in growth for the first time in three-and-a-half years, when we last saw like-for-like grocery inflation as high as it is now. While prices do look set to rise further, the current inflation rate of 2.6% is still below the average level experienced by shoppers between 2010 and 2014.

“A strong Easter also contributed to the market’s growth this period. In the past 12 weeks British shoppers splashed out £325m on Easter eggs with almost three quarters of the population buying at least one. Consumers plumped for more premium confectionery lines this year – the average price paid for an Easter egg rising by 8.6% to £1.65 – while 20 million packs of hot cross buns were bought in the Easter week alone.”

Sainsbury’s also sales rise 1.7%, the largest rise since June 2014 for the supermarket, although stronger growth among its rivals meant market share fell to 16.1% in the past 12 weeks.

Tesco returned to growth with sales up 1.9% after sales were hit last period by a late Easter and Ocado has doubled its share since late 2014, now accounting for 1.3% of supermarket sales.

The retailer is growing at 10.8% – second only to Aldi and Lidl and considerably ahead of the overall online grocery market, which currently has a growth rate of 7.8%.

At Iceland, Aldi and Lidl, sales rose by 9.3%, 18.3% and 17.8% respectively – ahead of the market.