Asda sees sales growth slow in fourth quarter

Uncertainty hits shoppers’ spending

ASDA REPORTED a 1 per cent increase in like-for-like sales in the fourth quarter of 2018, down from 2.0 per cent growth in the previous quarter as shoppers rein in their spending amid Brexit uncertainty.

This was the Leeds-based grocer’s seventh consecutive quarter of growth as it awaits the next stage of its proposed £12bn merger with Sainsbury’s.

Asda’s net sales rose 2.7 per cent.

Asda‘s chief executive Roger Burnley said 2018 was another challenging year for the retail market and the pace of change shows no sign of abating.

“The year ahead looks no less turbulent than the last, with uncertainties around Brexit playing on our customers’ minds,” he said.

“Whilst I am pleased with our performance in 2018 we must remain focused on ensuring the long-term sustainable success of Asda for our customers.”

He said it is clear that retailers have to be prepared to innovate and challenge their status quo if they want to continue to remain relevant.

Fourth quarter sales were boosted by higher demand for the grocer’s own-brand products, especially its premium Extra Special range.

“I’m immensely proud of our colleagues for their hard work in 2018 to keep the business moving in the right direction and I’m delighted that once again we will

be able to reward their hard work by paying all of our colleagues a bonus in spite of the challenging market we face,” said Mr Burnley.

The results come as Asda and Sainsbury’s await the provisional findings of a competition inquiry into their proposed megamerger, which are expected this month.

The Competition and Markets Authority (CMA) will publish the provisional decision ahead of a statutory deadline, which has been extended to the end of April.

It is expected to include proposed remedies for the merger, including the possible disposal of stores.

The watchdog this month extended the deadline for its final decision by almost two months, citing the scope and complexity of the deal.

If the deal goes ahead, Walmart will maintain a 42 per cent stake in the merged company.

The US retail giant reported a quarterly increase of 1.9 per cent in global revenue.

For the full year, revenue rose 2.8 per cent to £398.19bn.

The latest data from Kantar Worldpanel showed that Tesco was the best performer out of the big four with sales growth of 1.0 per cent in the 12 weeks to January 27, closely followed by Asda with growth of 0.7 per cent and Morrisons with growth of 0.4 per cent. Sainsbury’s saw sales fall by 0.3 per cent.

Discounters Aldi and Lidl continue to lead the field after 18.3 million households shopped in at least one of them over the past three months, spending an average of £204. With sales up 9.1 per cent, Aldi was the fastest-growing supermarket. Meanwhile, Lidl’s sales rose 7.3 per cent.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said the discounters are eating into rivals’ market share.

The year ahead looks no less turbulent than the last.

Roger Burnley, chief executive of Asda