UK retailer Asda has booked an increase in second-quarter sales but sales slowed in the most recent three months of its financial year.
In the three months to the end of June, excluding fuel, net sales grew 3.2%. Comparable sales, excluding fuel, increased 0.7%, the retailer reported today (16 August).
In the first three months of its financial year, Asda's like-for-like sales increased 2.2%.
Asda said its strongest performances in the second quarter were in grocery, apparel and electronics. Its online business recorded sales growth of 22.1% in the quarter.
CEO Andy Clarke said he was "proud" of the retailer’s performance in the quarter.
"We have continued to increase our sales and grow ahead of the market through a combination of lowering more prices and driving even harder on product quality. Our 'real value' strategy is paying dividends, and enabling us to grow the business in a sustainable way."
Show the press release
Walmart today released its earnings for Q2 fiscal year 2013, which includes an update of Asda's Q2 sales performance.
The full press release and investor relations script can be found at www.walmartstores.com/investors, but for ease of reference we've pulled out the specific mentions of Asda.
· Asda's second quarter covers the trading period from 1st April 2012 to 30th June 2012
· Like for like sales increased by 0.7 per cent excluding VAT
Commenting on the results Andy Clarke, CEO and President of Asda said:
"I'm really proud of our performance again this quarter. We have continued to increase our sales and grow ahead of the market through a combination of lowering more prices and driving even harder on product quality. Our 'real value' strategy is paying dividends, and enabling us to grow the business in a sustainable way."
On a 12pm conference call with analysts Doug McMillon, Walmart International President & CEO said:
"The U.K. had a strong second quarter, growing sales, and growing operating income faster than sales, excluding fuel.
"Despite a difficult consumer environment and the wettest weather on record, Asda gained market share in the second quarter, according to the Kantar Worldwide Panel Total Till Roll for the 12 weeks ending July 8. Excluding fuel, net sales grew 3.2 percent. Comparable sales, excluding fuel, increased 0.7 percent.
"The strongest performances were in grocery, apparel and electronics. In addition, our online business in the U.K. improved its already strong performance, with sales growth of 22.1 percent in the quarter.
"Asda's continued commitment to EDLP was recognized by ‘The Grocer' magazine in June. Asda's been named Britain's Lowest Priced Supermarket for the fifteenth year running and Britain's Favourite Supermarket for the second year in a row. In addition, the Asda Price Guarantee continues to build a loyal following; in Q2, it attracted an average of over 600,000 checks per week.
"The U.K.'s gross profit rate has increased slightly from last year due to strong inventory control in non-food merchandise. Second quarter expenses grew slower than sales, as Asda continues to develop sustainable efficiency savings through process improvements.
At a briefing held at Leith's School of Food and Wine, Asda's partner on developing its Extra Special range, CEO Andy Clarke and Marketing Director Stephen Smith highlighted the investment Asda has made over the past two years in delivering both low prices and quality for its customers.
The retailer has invested over £113 million in developing the quality of its food ranges over the past two years - from the launch of Chosen by you and Butcher's Selection to its relaunch of Smart Price and partnership with Leiths School of Food and Wine on Extra Special.
Andy Clarke comments; "Asda has and always will be the price leader, but we know that a tighter budget does not limit mum's desire to give her family the absolute best. We're redefining what real value means and showing that price and quality aren't mutually exclusive."
Marketing Director Stephen Smith reinforced the message that Asda's quality journey has only just begun and outlined plans to launch a new range of Extra Special ready meals in September that showcase Asda and Leith's shared commitment to quality at market leading prices. The range of 70 meals - include Beef Bourguignon, Lamb Shank with Caramelised Onion and Port Sauce and French Farmhouse Chicken Casserole have all been developed and approved with Leith's chefs.
