Asda claims low prices are driving it ahead

Published on Tuesday 17 February 2009 20:28

ASDA, the UK's second-biggest supermarket chain, yesterday said an influx of shoppers hunting for lower prices helped it achieve better-than-expected sales last year.

The chain's like-for-like sales growth of 7.2 per cent in the final three months of 2008 was second only to Morrisons as the value-for-money chains thrive in tougher times.

Asda – owned by US giant Wal-Mart – said it was winning customers across the UK, with the largest gains seen in southern England.

It said it had gained an extra 800,000 customers on top of its existing 17 million during 2008.

The fourth-quarter performance left Asda with annual like-for-like sales growth of 6.5 per cent, ahead of its own targets.

Last month, Morrisons posted an 8.2 per cent rise in like-for-like sales in the six weeks to 4 January. That compared with festive sales hikes of 2.5 per cent and 4.5 per cent at market leader Tesco and No 3 player Sainsbury's, respectively.

Asda chief executive Andy Bond said the group had "struck a chord" with shoppers. He said: "As a result of our price leadership we have continued our momentum and accelerated into 2009."

Asda's staff have already benefited after the supermarket's plans to pay out 22 million in bonuses for those who have been with the firm longer than six months.

The supermarket's online sales grew by more than 40 per cent over the year as it extended its home shopping service to cover more than 90 per cent of the population.