Asda’s Like-For-Like Sales Rise 9.6%, Helped By Private Label
British supermarket group Asda has announced stronger growth in like-for-like sales during the second quarter, propelled by heightened demand for more affordable alternatives to branded grocery items in the midst of a cost-of-living crisis.
Excluding fuel sales, the three months ending on June 30 saw a substantial 9.6% increase in like-for-like sales, contributing to a total revenue of £5.4 billion (equivalent to €6.2 billion), according to Asda.
Under the banner of ‘Just Essentials,’ Asda, which holds the third position in the UK grocery market after Tesco and Sainsbury’s, has implemented price reductions on select products, particularly its own-brand items.
The introduction of the value range ‘Just Essentials’ in the previous year, catering to budget-conscious consumers, led to an impressive 87% surge in sales during the second quarter. Additionally, sales of Asda’s own-brand products experienced a notable uptick of 14.7%.
While certain components of Asda’s cost structure still face inflationary pressures, the company has managed to translate savings from decreased commodity prices, such as milk and wheat, into lower prices for shoppers.
Michael Gleeson, the chief financial officer, emphasized in a statement that Asda is committed to mitigating the impact of inflation on customers.
The ongoing rise in living costs, which started the previous year and was primarily driven by surging energy prices, has left many British households operating within tight budget constraints.
Although inflation has somewhat moderated since then, it remains elevated at an annual rate above 7%, a level that, while lower than the peak, remains historically high and is the highest among the top seven advanced economies globally.
In a positive development, noted that its Asda Rewards loyalty app has attracted more than five million regular users among its customer base.
Furthermore, the company announced its progress toward finalizing a £2.3 billion (approximately €2.68 billion) acquisition deal of a significant portion of the UK and Ireland business of EG Group, a petrol station operator. The transaction is expected to be completed in the fourth quarter as planned.