Asda cuts debt and gives 1M meals to FareShare pre-Christmas.
Asda has shared its Q3 performance update, indicating positive sales and financial strategy trends. The period saw a 2.8% increase in sales compared to last year, excluding fuel. Their total revenue reached £5.4 billion, showcasing a steady growth trajectory.
Their focus on aiding customers during economic strains has been evident. The supermarket chain witnessed a 3.2% surge in food sales, emphasizing its commitment to offering value. Initiatives like the Just Essentials range, which saw a remarkable 21% rise in sales compared to the previous year, reflect their dedication to providing affordable options.
Recognizing the challenges faced by households due to reduced disposable income, Asda took steps to alleviate financial burdens. Price drop campaigns on over 600 popular items, resulting in an average 10% reduction, aimed to ease customers’ expenses. This year alone, Asda has invested £130 million in price reductions, emphasizing their commitment to supporting customers.
Their loyalty program, Asda Rewards, also played a significant role. In Q3, they returned £73 million to customers through the app, contributing nearly £300 million in Cashpot earnings since the program’s launch last year.
Financially, Asda showcased its strength by repaying a £200 million loan used to acquire Co-op stores. This repayment was made possible by their robust cash generation, which reduced the retailer’s total debt leverage to 3.8x.
While clothing and general merchandise sales experienced a 3.4% decline due to unseasonal weather, Asda’s George brand excelled in critical categories like Back to School and George Home. The launch of the Stacey Solomon home collection proved remarkably successful, driving substantial online sales and the busiest day ever on the George Home website.
Expanding its footprint, Asda actively converts acquired stores into Asda Express outlets. They’re on track to open their 100th Express store and plan to complete the conversion program in the first half of the upcoming year, aiming to extend their competitive prices to more communities across the UK.
Embracing the spirit of giving during the festive season, Asda expanded its collaboration with FareShare, committing to donating 1 million meals. This initiative involves identifying surplus food within their supply chain through their subsidiary IPL, further supporting FareShare’s efforts.
Asda’s festive offerings include 275 new lines, several of which have received accolades in prestigious taste tests. To make Christmas more affordable, they’ve introduced a frozen dinner for six at £25, averaging at £4.17 per person and cheaper than last year by an average of 8%.
Furthermore, Asda plans to reward more than a million customers using their Asda Reward app with a cash bonus of up to £5 for their Christmas Saver Cashpots, aiming to boost holiday spending.