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Asda notches up second quarter sales growth

The supermarket giant said targeted price cuts helped improve its performance.


Asda has released its second quarter results (PA)

Asda has released its second quarter results (PA)

Asda has released its second quarter results (PA)

Asda has notched up another rise in quarterly sales, but the speed of growth was pegged back by the timing of Easter.

The Walmart-owned supermarket, which is readying itself for a mega-merger with rival Sainsbury’s, booked a 0.4% increase in like-for-like sales in the three months to the end of June.

The figures represent the fifth consecutive quarter of positive sales growth, but it marks a slowdown from the 3.4% recorded in the first three months of the year.

Asda put this down to the early timing of Easter, which helped give it a boost in the first quarter but meant it did not benefit in the second.

Removing the impact of Easter, like-for-like sales in the quarter grew by 2.6%, Asda said.

Asda boss Roger Burnley said: “Our second quarter performance shows continued momentum for 2018 and this is the first quarter we have outperformed the market since 2014.

“We remain focused on delivering our strategic priorities and investing in the areas that matter most to our customers – innovation in our own brand, lowering prices and in continuously improving our shopping experience both in store and online.”

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Mr Burnley has been leading a turnaround at Asda in an attempt to improve sales amid a long-running supermarket price war.

Asda said targeted price cuts helped improve its performance, adding that better food sales volumes and “strengthening performance in non-food categories” also gave it a boost.

Net sales increased 2.4% in the period while the supermarket also saw its gross profit rate increase compared to last year, supported by better margins in non-food.

Walmart boss Doug McMillon added: “In the UK, comp sales were positive for the fifth consecutive quarter. We’re focused on improving the experience in our stores and providing great value for customers through lower prices, especially within our private label offerings.”

Asda saw online grocery sales rise 13.2% while growth at its fashion brand George soared 24.9%.

The firm also extended its new own brand vegan range, with products such as falafel burgers and sweet potato sausages.

Zoe Mills, retail analyst at GlobalData, said: “Asda has received plenty of criticism over recent years but it is putting its past woes firmly behind it.

“Despite its recent period of good growth, Asda is still under threat from the changing dynamic in the food & grocery sector.”

Asda did not give an update on its £12 billion merger with rival Sainsbury’s.

The duo have previously said the deal will produce £500 million in cost savings.

Consumers have also been promised cheaper everyday items, although it is not yet known where the price cuts will fall.

The Competition and Markets Authority is scrutinising the deal and it is expected that scores of stores will have to be offloaded as part of the competition review.