Asda, which is now owned by the Issa brothers and TDR Capital, delivered its best sales performance of 2020 during the festive period – although it still lagged behind its main rivals.
During its fourth-quarter period to 31 December, group’s like-for-like sales increased by 5.1%. This compares to a 2.7% rise in the previous quarter.
Asda’s growth accelerated to 6.9% in the eight weeks to 24 December, driven by strong demand for premium ranges. This compares to increases of around 8% at Tesco and Morrisons over similar periods.
As noted by its rivals, Asda’s growth during the period was driven by changes in shopping behaviour with its customers trading up and spending more on premium categories at Christmas to treat themselves after a difficult year. Demand for the chain’s premium Extra Special lines jumped 30% year-on-year in December.
The supermarket also continued to see strong growth in the online channel, with combined net sales across its Asda and George websites increasing by 76% year-on-year. The group has increased its grocery home shopping capacity by 90% to 850,000 weekly slots between March and December to meet surging consumer demand.
Asda’s CEO Roger Burnley said: “Our focus on keeping prices low, providing great quality products and keeping customers safe when they visit our stores were key to delivering a strong performance across the quarter and particularly during the busy Christmas period.”
The Issa brothers and TDR completed the purchase of a majority holding in Asda from Walmart on Tuesday in a deal giving it an enterprise value of £6.8bn.
However, the transaction is still subject to approval by the Competition and Markets Authority (CMA) which has recently confirmed it will make a decision by 20 April. The brothers and TDR have said they “remain confident of a positive outcome”.
NAM Implications:
- Key stakeholders will be interested in optimising performance…
- …up to and after the anticipated CMA April deadline.
- Opportunities for NAMs to help in the transition?
- Especially via a financial argument to support product initiatives?
