Every little helps as Asda’s profits inch up
ASDA’S newly-released financial figures for 2014 have shown that the supermarket’s strategy of holding its nerve was paying off, as profits inched up.
The Wal-Mart owned group increased its pre-tax profits by 0.7% to £920.6m in a very tough trading environment.
The headline sales figure – like-for-like sales – showed a fall of 1.0%, and Asda’s total revenues were also down slightly, dropping 0.4% to £23.3bn.
However once the effect of fuel sales were stripped out and the revenues from its 17 stores which opened during the year, and other stores open for less than 12 months, Asda added £100m in sales.
Asda’s chief financial officer Alex Russo said: “The external environment continued to be challenging, however customers had more money in their pockets as a result of improved employment levels and deflation in food and fuel prices.
“We continued to foucs on price for our customers, maintaining our price leadership over our supermarket peer and entering the third year of our ‘Price Lock’ initiative by investing a further £300m in the price of everyday essentials such as bread, milk and butter.
“Maintaining a low operating cost model is a fundamental part of our drive to reduce costs in our business and invest this in prices for our customers.”
Asda continues to face challenging trading conditions, and its quarterly like-for-like sales in 2015 have so far showed big falls, although the second half of the year will have the benefit of weaker comparables.
The group, which celebrated its 50th birthday this year, employs around 175,000 people and has its head office in Leeds.
Asda’s quarterly like-for-like sales under chief executive Andy Clarke, since 2010:
