Store wants to cushion shoppers from inflation

May 14 2008 by Iain Laing, The Journal

SUPERMARKET Asda has pledged to protect shoppers from inflationary pressures after revealing a 5% rise in underlying first-quarter sales.

The UK’s second biggest grocer – part of the Wal-Mart group – said the like-for-like sales increase came as it strove to cut prices for shoppers.

Official figures yesterday revealed inflation had risen to 3% last month after a shock 0.5% leap since March, its fastest rate of growth for nearly six years.

Asda president and chief executive Andy Bond said the supermarket had to play its role in protecting shoppers from rocketing commodity prices, as they also faced steep increases in petrol and other energy bills.

He said: “Whilst today’s results are encouraging, we mustn’t become complacent, especially in the current economic climate.

“We have a duty to lock down inflation by working with our suppliers to cut costs to ensure that our customers are always getting the best possible deal on their weekly shopping.” Asda posted sales up 6.4% on a comparative basis, excluding petrol, with the early Easter and February’s extra day taken into account.

Total sales saw an increase in the “high single digits” for the first quarter, according to the chain.

It said it had also seen a healthy sales performance in April, with strong fresh food sales.

Sales of its premium own-label range, Extra Special, meanwhile rose 30% in the first quarter, suggesting that hard-pressed customers are still prepared to splash out on food.

The figures contributed to a better-than-expected first quarter performance from its parent group Wal-Mart Stores, the world’s biggest retailer.

Wal-Mart banked a near 7% increase in profits to £1.55bn in the three months to the end of April.

Revenues for the US group rose to £48.9bn compared with £44.3bn in the first quarter the previous year.

Sainsbury’s, which ranks third in the UK, is expected to report underlying pre-tax profits up 28% to £485m in full-year figures today.