Gin helps Asda ring up fifth quarter of rising revenue
SUPERMARKET chain Asda has secured its fifth straight quarter of rising sales, boosted by an expanded vegan range and the launch of premium gins.
Like-for-like sales, which strip out the impact of new stores, grew by 0.4pc during the second quarter, strengthening the company’s turnaround.
Asda, which is set for a £15bn merger with Sainsbury’s, said the online business and its cut-price clothing line George.com enjoyed a sales boost of 13pc and 25pc respectively.
Roger Burnley, chief executive, said it was the first time the chain had outperformed the market in four years.
He said: “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.”
Setting aside the impact of Easter, which fell in the first quarter of the year, like-for-like sales expanded by 2.6pc.
That compared to a 1pc rise in likefor-like sales during the first three months of the year. Asda said sales were lifted by the introduction of falafel burgers and sweet potato sausages into its vegan range. The rollout of Extra Special Gins also proved popular with customers.
The update comes as Britain’s big four grocers grapple with challenges on all fronts.
Rising costs, waning consumer confidence and disruption from German discounters and Amazon have all posed threats to their financial performance.
The Walmart-owned business reported a 10pc fall in pre-tax profits to £712.6m for the year to December 2017, according to documents filed at Companies House.
The drop was partly triggered by Asda’s decision to invest £120m in slashing prices to prevent inflation bumping up costs for customers.
Sainsbury’s and Asda shook the grocery sector in April by unveiling a deal to create a retail giant with a market share larger than Britain’s biggest supermarket Tesco.
The two supermarkets have vowed to slash prices on everyday items by 10pc, and stump up cost savings of £500m, if the deal wins regulatory backing.
The move would hand Walmart around £3bn in cash and a 42pc stake in the combined business.
However, the two supermarkets are expected to be forced to sell some of their 2,800 UK stores to satisfy competition concerns surrounding the deal.