Asda sales grow in second quarter

ASDA has announced a 0.5% increase in like-for-like sales in its second quarter.

The Leeds-headquartered supermarket giant credited its continued investment of £1bn in Everyday Low Prices (EDLP) as key to delivering the sales growth, for the ten weeks to the end of June.

Asda president and CEO Andy Clarke said: “The last quarter has seen unprecedented change within the food retail sector, and whilst I do not underestimate the challenge currently presenting retailers, I am proud that our business identified and put plans in place to respond to these changes early. We have a clear five year strategy based on Everyday Low Prices and we continue to implement that strategy with agility and pace.”

In non-food, the George brand continues to perform well and is now the second largest clothing brand in the UK in terms of sales volume.

Clarke and Alex Russo, Asda’s chief financial officer, noted that Asda is making good progress on its ambition to ‘lead online’ and reported market share had increased to 18.4%. This growth continues to be driven by the expansion of Click and Collect, which now accounts for 10% of all online orders and is used by more than 20,000 Asda customers per week. Asda anticipates that over the coming five years Click & Collect orders will treble with 30% of all orders expected to be collected in Asda stores. 

Clarke said the decision to restructure the management team, which was announced in July, was one of the most difficult of his career but stated that he was proud that the business had engaged in genuine consultation with colleagues, which has resulted in an additional 600 roles being added in to the new structure plans. More than 7,000 managers within stores are currently going through training for their new roles, which begin in October.

Asda opened three new superstores and two supermarkets during the second quarter. Five new sites were also acquired from the Co-op, further strengthening the retailers small store portfolio. Quarter three will see three new openings for the retailer – with Barhead supermarket in Scotland opening this week. Clarke also confirmed that the retailer will continue to innovate its existing space, and in 2015 will roll out 86 remodels and 87 refurbishment projects across its supermarket estate.

The retailer said it will also continue to develop its large store offer – rolling out three new ‘format trials’ in stores over the next six months that will test new ideas and innovations for large stores that will inform plans for further development of the portfolio in 2016. Clarke said that he was ‘confident’ in the future of large store formats but that the space needs to be used innovatively and create new ‘reasons to visit’ for customers. 

He concluded: “I am pleased with our performance in the quarter and our business has shown that it is well positioned to meet the demands of a challenging market. However, I’ve been in this business for too long to measure success by quarters and we remain on a long-term journey

“Innovation, low prices and customer service remain at the heart of our business and over the coming months and years we will continue to implement and build on this successful strategy as we constantly look at new and improved ways to run our business.”