Asda carves out second-quarter sales growth

US-owned Asda recently called off a proposed merger with rival Sainsbury's. Picture: Michael Gillen
US-owned Asda recently called off a proposed merger with rival Sainsbury's. Picture: Michael Gillen
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Supermarket major Asda has overcome tough competition and a challenging consumer backdrop to notch up steady sales growth in the second quarter.

Total sales lifted 1.3 per cent in the three months to the end of June, while comparable sales were up 0.5 per cent, excluding petrol, year-on-year.

The period benefited from the later timing of Easter, but was up against strong results last year when the World Cup and summer heatwave boosted performance. Margins were under pressure.

Over the first six months of the year, sales eased 0.3 per cent.

Chief executive and president Roger Burnley said: “If ever a case study on the impact the mood of the nation has on UK spending habits were needed, this quarter has provided it.

“Consumer confidence levels are at an almost six-year low – due in no small part to the ongoing uncertainty around Brexit and amplified by the impact of weather and tracking against national sporting events in the same period last year.

“As a result our non-food business has been challenged during the period, however we’re satisfied that our food business has continued to perform well and our online growth continues to outpace the market.”

Asda recently called off a proposed mega-merger with rival Sainsbury's that would have created an industry giant bigger than market leader Tesco.

During the period, the grocery giant, owned by US-based Walmart, spent some £22 million on refurbishing nine stores and rolled out a Scan and Go mobile option to 25 outlets.

Charlotte Morrison, general manager at global branding and design agency Landor, noted: "While Asda’s latest results show its sales are slightly down on last year’s bumper summer, it seems the retailer has actually bounced back from its failed merger attempt fairly strongly.

"With the discounters eating away at market share, the Leeds-based supermarket has weathered the disruption better than its competitors by remaining true to what it stands for: good value."