Asda sees sales growth but wants planning reforms

SUPERMARKET group Asda has said it beat its full year sales and profit plan thanks to strong fourth quarter sales growth of 7.2% but has called on the Government to reform the planning system to allow it to invest in more stores during the current downturn.

The boost to sales in the last three months of 2008, covering the crucial Christmas trading period, saw Leeds-based Asda, the UK’s second largest grocery chain and part of US store giant Wal-Mart, increase sales by 6.5% for last year as a whole.

The strong sales growth puts Asda hot on the heels of its Yorkshire supermarket rival Morrisons which last month said it achieved record customer numbers over the crucial Christmas period with an 8.2% rise in like-for-like sales excluding fuel in the six weeks to January 4.

Both Asda and Bradford-based Morrisons believe they are winning customers from Tesco – with like-for like sales growth of 2.5%, and Sainsbury’s which saw like-for-like sales figures of 4.5% in the 13 weeks to January 3,.

Asda president and chief executive Andy Bond said the group had seen its sales momentum from last year accelerating into 2009 thanks to its “strengthened price leadership”.

Mr Bond believes rebuilding consumer confidence is key in the current economic climate, he added: “Despite the gloomy headlines there are still millions of people willing to spend their hard-earned cash and get Britain on the road to recovery. But they will only do so if they believe they are getting genuine value for money.

“We are ready and willing to invest in dozens of deprived areas up and down the country, places that would benefit from our low prices, and investment into their local economies. But the planning system works against us. That’s why I’d urge the government to push ahead with their planning reforms and introduce a competition test that would widen the choice of supermarkets available to consumers and create thousands of much needed jobs.”

Asda’s fourth quarter sales rise of 7.2% compared to rises of 6.9% in the third quarter of 2008, 6% in the second quarter and 5% in the first three months of last year and said it has now out-performed the market for 11 successive quarters.

Last year saw Asda rolled out its home shopping service to cover more than 90% of the UK population and launching Asda Direct with more than 750,000 non-food products, including its entire George clothing range. As a result online sales grew by more than 40% in 2008.

Mr Bond added: “2008 was yet another vintage year for ASDA as we out-performed both our sales and profit plan, and grew our market share to its highest ever level.

“As a result of our price leadership we have continued our momentum and accelerated into 2009. The introduction of market leading, permanent deals on a range of everyday essentials have struck a chord with shoppers.

“We are also attracting an increasing number of customers across the UK, in particular from the South of England, as they seek out real value.”