Asda reports drop in profit but like-for-like sales increase as turnaround gathers pace
Asda has reported a 13% fall in profit but saw a return to like-for like-sales growth in 2017, driven by major investment in lowering prices as its turnaround plans gain momentum.
The Leeds-headquartered Big Four supermarket, which is set to be acquired by Sainsbury’s to create the largest grocery firm in the UK, posted sales up 0.5% for the year to the end of December compared to a 5.7% decrease in 2016.
Asda said its return to like-for-like sales growth was driven by investments in lowering prices to mitigate the impact of food inflation, further improving the range and quality of its Own Brand products.
Operating profit was in line with expectations at £735.4m compared to £845.3m in 2016, a result of planned strategic investments in price, quality and service, the retailer said.
The accounts filed at Companies House also confirm that Asda paid £128.4m corporation tax in 2017.
During 2017, Asda opened one new Home Shopping Centre, three new superstores and five new supermarkets, representing 146,000sq ft of new space.
Earlier this month, Asda reported its fourth consecutive quarter of growth with a 1.0% (Easter adjusted) increase in like for like sales during the first quarter of 2018.
Asda president and CEO, Roger Burnley, said: “Our 2017 accounts reflect a solid performance and a strong, well-managed business. During the year momentum returned driven by a series of planned investments in lowering prices, further improving quality and innovation in our Own Brand ranges and providing an even better shopping experience whether in store or online. Our customers have responded well to this strategy and the momentum of 2017 has continued into the first quarter of 2018.”
