Andy Clarke, the chief executive of Asda, has returned the Walmart-owned grocer to sales growth for the first time since last year, boosted by improvements to its ranges.
The UK's second-biggest supermarket also revealed it is to create 7,500 new jobs next year, of which half will come from the 10 to 15 additional food stores it will open in 2011.
Following two successive quarters of sales decreases – down by 0.3 per cent and 0.4 per cent – Asda posted a 1.3 per cent rise in like-for-like sales, excluding petrol and VAT, in the three months to 30 September. Its last previous sales growth, of 4.6 per cent, had been in the final quarter of 2009. The return to form of Asda means it is back in the pack, in sales-growth terms, among the "big four" – although the recent reported sales growth of Sainsbury's suggests it is ahead of Asda, Tesco and Morrisons.
After taking the helm in May, Mr Clarke said that Asda had not been as focused on the quality of its food as it should have been, and the company relaunched its core range, Chosen By You, alongside a revamp of its Extra Special premium lines.
In the last quarter, the grocer was also helped by a continued robust performance of its George at Asda fashion brand and its introduction of the Asda Price Guarantee. This promises that if customers are able to purchase a basket of eight or more comparable products more cheaply at Tesco, Sainsbury's or Morrisons, Asda will give the customers a money-off voucher for the difference, plus a penny, which they can redeem the next time they go shopping at Asda.
Mr Clarke, who was previously Asda's chief operating officer, said: "After a particularly tough start to the year, we're pleased with the progress we're making. The new initiatives we have put in place – Asda Price Guarantee, Chosen By You launch, Extra Special revamp, plus George firing on all cylinders – are all increasing the number of customers coming through our doors.
"As we approach Christmas, we are in good shape and are clearly focused on delivering for our customers in three key ways: keeping our prices low, enhancing our quality and driving product innovation into our stores through the introduction of new ranges," he added.
Asda said that profit for the third quarter "grew ahead of sales, beating internal targets".
Following the relaunch of Chosen By You, which was supported by an extensive advertising campaign, Asda said its Lemon Daisy Cupcake was "the fastest-selling bakery line" selling more than 200,000 cakes in the first month, while its family lasagne had achieved sales 138 per cent ahead of those forecast.
Asda said the new jobs next year would come from a combination of opening new stores, the expansion of its home-shopping service and its conversion of Netto stores, where it plans to double the staffing levels, creating 1,500 new posts. Asda acquired the Danish supermarket group's 194 Netto UK stores for £778m in May, but four months later, the Office of Fair Trading forced it to offload 47 for competition reasons.