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Business News

Asda sales up amid fall in shoppers


Supermarket giant Asda said today that customers were shopping less frequently but spending more in a bid to overcome high petrol prices.

The UK's second biggest grocer behind Tesco saw like-for-like sales, excluding VAT and fuel, increase by 1.3% between July 1 and September 30.

Asda, which holds 17% market share compared to Tesco's 31%, saw the number of shoppers drop 1.3% in the period - but the average basket price increased 2.6% in a sign customers continued to "consolidate" shopping trips.

The robust growth figures cover the period before it engaged in a highly-publicised price war with Tesco and Sainsbury's in October.

Asda, which pledged to slash the cost of 3,000 products in addition to its Asda Price Guarantee, went further today by promising to extend its cheaper own-label ranges.

The Walmart-owned grocer also announced that it was on track to complete its conversion programme for 147 recently-acquired Netto stores, bringing its store total to 528.

Walmart's international division, which includes Asda, reported a 20.3% increase in net sales including fuel to 32.4 billion US dollars (£20.4 billion) in the three months to October 31.

Doug McMillon, president and chief executive of Walmart International, said: "The UK grocery market is entering into what is traditionally a heavy promotional period in time for Christmas.

"Asda, however, continues with a very simple promise to customers - our prices are 10% cheaper than the competition on comparable baskets, or we'll give you the difference."

Asda cut prices last month on items such as bread, butter, cereal, cupboard essentials, toilet tissue, laundry powder and fruit, including the lowest-priced bananas at 52p per kilo.

The campaign followed a similar move by Tesco, which also cut the prices of 3,000 everyday items.

The move came just before Tesco revealed its worst sales performance in two decades, with sales excluding new store space, VAT and petrol down 0.9% in the three months to August 27.