Member Article

Asda remains cautious despite upturn in fortunes as sales grow

Leeds-based Asda, Britain’s second largest retailer, has announced like for like sales growth of 0.5% for the 10 weeks to 30th June 2014.

This is good news for a retailer embroiled in Britain’s “supermarket wars” between big retailers like Tesco, Morrisons as well as lower end retailers Lidl and Aldi, and upper market supermarkets such as Waitrose.

Speaking at a briefing in London today Asda President and CEO Andy Clarke commented that the structural changes in the retail market continued to present tough challenges, but that he was pleased that Asda had been quick to recognise the structural changes taking place in the UK market and in November 2013 set out its five year strategy to redefine value retailing.

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.

Clarke explained that a key pillar of Asda’s strategy remains a continued investment of £1 billion in Everyday Low Prices (“EDLP”), which has been at the core of the business for decades.

the firm said that Asda maintained a strong price gap to the rest of the Big 4 during the quarter and extended Price Lock to 160 lines.

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. Asda has also launched the George Home range, which achieved double digit growth in the quarter.

Clarke and Russo 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.

In the last three months Asda has extended the hours customers are able to collect their shopping on a Sunday by four hours, driving a 20% uplift on the day’s orders.

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.

Andy Clarke 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.”

This was posted in Bdaily's Members' News section by Clare Burnett .