Asda revealed yesterday that its underlying sales had fallen during its third-quarter after facing tough comparatives with strong demand in supermarkets last year when more meals were being consumed at home. The grocer also outlined the measures it was taking to ensure good product availability for its customers during the Christmas period.
Over the 13 weeks to 30 September, Asda’s like-for-like sales declined by 0.7%. However, the group highlighted that on a two-year basis, growth was 2.0%, with food sales up by 3.4%.
Recent industry data showed that Tesco was the only Big Four supermarket seeing growth in recent months as more normal trading patterns return.
Asda said that the lockdown trend of customers treating themselves to premium own-label products had continued with it adding more than 200 new lines to its ‘Extra Special’ range this year in response.
Demand for online groceries at Asda softened slightly during the quarter, with sales down by 2.7% on the same period last year as people returned to shopping in-store. However, online sales remain significantly higher than pre-pandemic levels, up by 80% on the same period two years ago.
Asda’s like-for-like clothing sales grew by 1.2%, although general merchandise sales slipped 3.1% after the same period last year was boosted by lockdown-related spending on people’s homes and gardens.
The group revealed that the rollout of its ‘Asda On the Move’ convenience stores on EG Group forecourt sites was on track with 30 opened so far. It also said it was encouraged by the early uptake of its new Asda Rewards loyalty programme currently being trialled in a limited number of stores.
Meanwhile, Asda outlined the steps it was taking to navigate the industry-wide supply chain problems that have led to warnings of shortages during the Christmas period. Retailers are grappling with delays in international shipments that are being compounded by labour shortages in domestic transport and warehouse networks, with a lack of HGV drivers particularly acute in the UK.
Asda’s measures include increasing the volume of items such as turkeys and pigs in blankets in store compared to last year. And it is building extra stock of other festive food items in its depots.
The supermarket also revealed that it had chartered its own cargo ship to protect the availability of key Christmas products, including decorations, toys, clothing, and gifts. The ship is carrying 350 containers of items from East Asia and is the retailer’s first-ever private charter. It is due to arrive in the UK shortly.
“We know how much Christmas means to our customers, especially after some missed out on celebrations with friends and family last year,” said the group’s new owners, Mohsin and Zuber Issa.
“Our colleagues have pulled out all the stops during the last few months to make sure customers can get their favourite festive products at Asda and enjoy the Christmas they deserve.”
Last week, Asda named Lord Stuart Rose, the former boss of Marks & Spencer, as its new Chairman. He brings a wealth of retail experience to the group and will help the Issa brothers find a new Chief Executive for Asda after Roger Burnley’s earlier-than-expected departure from the role in August.
NAM Implications:
- The mults have the means to ensure supplies and availability.
- Big issue for suppliers is whether to focus efforts on mults or indies.
- Especially given the drift to premium own label in the mults…
