Asda has reported a 9.6 percent increase in like-for-like sales during the second quarter, compared to the same period a year earlier, and up 1.8 percent in the previous quarter due to the continued focus on supporting families during the cost-of-living crisis. The supermarket's revenues, excluding fuel, were £5.4bn for the quarter.
Asda's continued investment in driving value for its customers through a combination of low prices and improved quality helped to drive a 14.7 percent increase in own-brand sales during the quarter compared to a year earlier.
Just Essentials, Asda's value range launched last year specifically to help families shop on the tightest budgets, is now firmly established as the number one value range in the market with 20.2 percent market share and sales during the quarter were 87 percent up year-on-year. More than 22 million customers have bought Just Essentials products since the range launched in May 2022.
With the latest Asda Income Tracker showing that 40 percent of UK households had negative disposable income across the quarter, meaning their take-home pay did not cover spending on bills or essentials, Asda redoubled its value initiatives to provide extra support for customers during the quarter.
Commenting on the supermarket's performance in the quarter and ongoing efforts to support consumers through the cost-of-living crisis, Mohsin Issa, Asda's co-owner, said the retailer knew that thousands of families were continuing to struggle with the cost of living.
"We're committed to doing all we can to support them. This quarter, we have locked the price of over 500 everyday items to help families keep a handle on their budgets and reduce the price of over 200 own–label items by an average of 9 percent, including fresh fruit, vegetables, cupboard staples and ready meals," said Issa.
Asda's constant focus on keeping prices low has seen the retailer win the Grocer 33 pricing award for the 26th consecutive year.
"In addition to investing in value on the shelf, we're the only major retailer to give money back to customers every time they shop through our Asda Rewards loyalty app. More than 5m customers regularly use the app and have earned over £200m since launch to spend in-store or online."
Asda has also extended its hugely popular kids eat for £1 cafe offer until the end of the year. Through the programme, Asda has proudly served over two million meals to kids since it launched the initiative last June, investing £1.3m to keep the prices pegged at £1.
During the second quarter, Asda also updated investors on the performance of its George, General Merchandise (GM) and Online Grocery divisions. Both its clothing and GM businesses outperformed the broader market during the second quarter, with like-for-like sales growth of 2.8 percent and 6.3 percent, respectively, compared to the same period in 2022. A credible quality and style offer, particularly in dresses and swimwear, meant George maintained full-price solid sales during the quarter, whilst in GM, Asda's evolved toy offer through the 'Big Asda Toyshop' offer delivered strong sales.
Asda continues to perform strongly in online grocery, delivering an average of 800k orders per week across the quarter and maintaining its position as the UK's second-largest online supermarket. The recent Grocer Golds awards recognised the investments in improving online customers' shopping experience and rolling out a comprehensive quick commerce offer, where Asda was named Online Supermarket of the Year.
In April, Asda increased pay for its 123,000 hourly paid retail colleagues to £11 per hour, with a second increase to £11.11 in July, an investment totalling £141 million.
Michael Gleeson, Asda's Chief Financial Officer, said that the growth in like-for-like sales across the quarter reflected the strength of Asda'scustomer proposition. The retailer's customer focus has resonated with the nation.
"Whilst we continue to see inflation headwinds in our cost base, wherever we are seeing reductions in commodity prices, such as wheat and milk, we are doing the right thing to pass those savings to our customers wherever we can, particularly in our brand ranges," said Gleeson.
Asda has also invested in supporting its colleagues, increasing the rate of pay for 123,000 hourly paid store colleagues to £11.00 in April and again to £11.11 per hour in July.
"As well as investing to support the immediate needs of our customers and colleagues, we continue to invest in driving the long-term sustainable growth of our business in areas like loyalty and convenience."
The integration of 119 stores acquired from Co-Op is now underway. The retailer's acquisition of the EG UK and I estate is on track to complete in the fourth quarter, allowing Asda to bring its value in fuel and groceries to even more communities.
The supermarket also shared highlights from its latest ESG report published yesterday, which charts progress against a range of targets in 2022. These include a 40 percent reduction in scope one and two carbon emissions compared to the 2015 baseline.
