Asda delivered an increase in profits and sales during 2018 – a year it unsuccessfully tried to merge with rival Sainsbury’s.
Accounts filed at Companies House for the 12 months to 31 December 2018 show Asda’s operating profit rose 9.2% to £803.2m, aided by its cost cutting programme. This compares with a 13% fall the year before.
Total turnover was up 3.1% (+2.1% excl. fuel) to £22.92bn, whilst like for like sales increased by 1.6%, compared to a 0.5% rise the year before.
As was the case in 2017, no dividend was paid to parent company Walmart.
In notes accompanying the figures, the group attributed its growth to a focus on targeted price investments to narrow the gap with the discounters, further development in own brand product quality and range, and better availability, particularly in fresh. The group has also worked to improve store environments and embrace technology to make shopping easier for its customers.
Asda also claimed that its online sales grew ahead of the market following developments to its website and mobile apps.
Last month, Asda reported a 0.3% fall in like-for-like sales for the first half of 2019, noting the challenges facing shoppers in the current climate of Brexit uncertainty.
Asda’s Chief Financial Officer, Rob McWilliam, commented: “The challenges faced in the market during 2018 have only intensified as we move through 2019 and we remain steadfast in our approach to win on price, deliver a consistent customer experience and drive growth where customers care.”
Following the collapse of the Sainsbury’s deal, Judith McKenna, President and CEO of Walmart’s international division, revealed the US giant was considering a stock market listing for its Asda subsidiary. However, Asda’s management has suggested this won’t take place for least two years with it focused on further improving its performance in the meantime.
NAM Implications:
- i.e. Discounters clearly in the Asda firing line…
- Time for suppliers to ensure they access a fair share of both cost and value…
