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Reversal of fortune lifts Asda to third place

Asda claimed it had replaced Safeway as Britain's third-largest supermarket group yesterday as the company, boosted by rising shopper numbers and a string of customer service initiatives, announced an impressive leap in profits. Asda claims its Brolly Patrols, Pet Stops and glitzy check- outs for high-spending customers have made its stores fun places to shop.

According to figures compiled by the market research group AGB, Asda now claims a market share of 9.7 per cent, behind Tesco with 18 per cent and Sainsbury with 17.8 per cent. Safeway, part of the Argyll group, is fourth with 8.4 per cent.

Though the AGB figures are only one measure of the market, most industry experts agree that Asda is at least level with Safeway, though Safeway remains more profitable. It is an impressive performance from a company in dire straits three years ago - before Archie Norman arrived as chief executive.

Announcing profits of pounds 264.8m for the year to April, Mr Norman said the group's three-year recovery programme was complete. "Asda has outperformed the industry for the third successive year against a background of tough competitive pressure," he said.

Asda's like-for-like sales increased by 8.4 per cent over the year, placing it well ahead of rivals such as Sainsbury, which has recorded 1.1 per cent, Tesco (3.4 per cent) and Safeway (0.7 per cent). The company says more than 5 million customers shop in its superstores every week - a million more than in 1992. Asda plans to open six superstores this year and refurbish 14.

The company says it is looking for locations in Northern Ireland but has not yet signed for any sites. Loyalty card trials are continuing but there has been no decision on a national roll-out.

Mr Norman announced a 10-point programme for the next three years. This includes expansion of non-food ranges such as entertainment and clothing, where the George label of clothes pioneered by Next's founder, George Davies, was proving popular.

Asda's innovative customer service programme will be extended. Recent initiatives include the Brolly Patrol, which features porters with umbrellas bearing the legend: "Another drier Asda buyer" to help customers to their cars on rainy days. The Pet Stops encourage customers to bring pets to the store. Also popular are the Big Shopper check-outs, red-carpeted areas where staff wearing bright yellow jumpers serve high-spending shoppers.

Asda also announced staff share ownership plans yesterday to enable eligible staff to receive share options equal to 125 per cent of salary.

In the year to April, Asda's operating profits increased 28 per cent to pounds 251m. The previous year's figures were affected by pounds 179m of property provision. Sales increased from pounds 4.88m to pounds 5.2m. The dividend was raised by 25 per cent to 2.2p. The shares finished 4.5p higher at 90p.