Own-label ranges boost sales at Asda

The UK's second biggest grocer Asda underlined its steady recovery after a testing period yesterday by posting a rise in third-quarter sales.

Asda, which is owned by the US retail giant Walmart, said the performance of its own-label ranges – particularly its Chosen by You core range – and message on low prices had helped drive the sales growth. Its customers made fewer trips to its big out-of-town stores due to stubbornly high petrol prices, but more than offset this by increasing their average spend per transaction.

Asda's underlying sales, excluding VAT and petrol, rose 1.3 per cent in the quarter to 30 September, an improvement on its 0.5 per cent growth in the previous quarter.

While the grocer lagged its big rivals for much of 2010, the sales and latest Kantar data suggests that Asda is now growing ahead of Sainsbury's and Tesco, but behind Morrisons.

Doug McMillon, the chief executive of Walmart International, said Asda's operating income rose ahead of sales, excluding petrol. He said: "Traffic declined by 1.3 per cent and average ticket increased 2.6 per cent, as customers continue to consolidate their trips in the face of high fuel prices."

Asda said its customers had checked more than 13 million baskets online since the current version of its Asda Price Guarantee – which promises that on comparable groceries it will be 10 per cent cheaper than four of its big rivals – went live in January.

Asda's underlying sales – at shops open more than 12 months – are set to get a further boost after it completes the conversion to its own brand of the acquired 147 Netto stores next week. The grocer purchased the Danish supermarket group's 194 Netto UK stores for £778m in May 2010, but it had to offload 47 for competition reasons.

l Metric Property Investments has unveiled a £150m joint venture with Universities Superannuation Scheme, a pension fund, to invest in small retail parks. The joint venture has already agreed to acquire two properties from Metric at Inverness and Swindon for a total of £19.9m.

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