Asda hails 2006 'a turnaround year' as Wal-Mart profits rise

ASDA, the country's second-largest supermarket chain, has called 2006 a "turnaround year" as improvements to its ranges resulted in better trading.

Effectively the UK arm of the US-based Wal-Mart, the group said sales improved in each quarter of the year to 31 January leading to its strongest annual like-for-like sales growth in two years.

Details of Asda's performance emerged as Wal-Mart published fourth-quarter results in the US. No financial figures were provided for Asda, which is currently locked in a battle with Sainsbury's for second place in the supermarket sector.

Over the year, the supermarket chain said it invested in improving a number of departments, including increasing the quality of its fresh foods and own-label products and tripling its organic range. It also rebranded and doubled its premium Extra Special range, which helped lead to record sales over the Christmas period.

Asda chief executive Andy Bond said: "We're making great progress getting back on track. Our customer numbers are up, and we're successfully broadening our appeal while continuing to keep prices low."

Sales at Asda account for around half of Wal-Mart's international sales, which this year hit $77.1 billion (39.4bn), while international sales account for 20 per cent of overall sales for Wal-Mart Stores.

Mike Duke, vice-chairman at Wal-Mart International, said the past financial period had been a "turnaround year for Asda".

He added: "For the year as a whole, sales were up in the mid single digits and profits increased slightly".

He said the growth had "exceeded business plan sales for the year" and sales had improved from a negative comparative in the first quarter to a healthy like-for-like growth in the final three months of the year.

The group said it now had a million more regular shoppers over last year, while it had also seen an increase in average spend per customer, despite cutting prices.

Beating market expectations, Wal-Mart's net profit for its fiscal fourth quarter totalled $3.94bn (2bn), up from $3.6bn a year earlier. Overall quarterly sales added 10.9 per cent to $98bn.