Asda brands trigger rise
THE chief executive of Asda said initiatives such as price-matching and the revamp of the supermarket’s upmarket Extra Special range helped trigger a return to sales growth in its third quarter.
Andy Clarke, a former Asda store manager who took on the chain’s top job in May, said its mid-tier Chosen By You range and George clothing label also boosted customer numbers.
Mr Clarke’s strategy for growth, which has helped turn around six months of declining like-for-like sales at the chain, followed comments made in his first speech as boss that Asda had not focused enough on food quality.
Asda posted a 1.3% increase in like-for-like sales in the three months to September 30 and said profits for the third quarter had beaten its own targets.
The update comes as Asda revealed plans to create some 7,500 jobs next year, through store openings and its recent takeover of Danish supermarket Netto in the UK.
The supermarket sector is proving increasingly competitive as cash-strapped consumers resist price hikes caused by commodity price inflation.
Figures released last week revealed Asda, the UK’s second biggest supermarket chain, saw its market share edge lower to 17.2% in the three months to October 31.
Mr Clarke said Asda is keeping its prices low through its Asda Price Guarantee initiative, which allows customers to compare shopping bills to other supermarkets and receive a refund if they pay more elsewhere.
Asda said weekly comparisons through the Asda Price Guarantee site increased four-fold in the quarter.
Mr Clarke said: “We’re acutely aware of our responsibility to do everything we can to keep lowering costs, and keep the cost of living down for all our customers.”
Asda said its relaunched Chosen By You and Extra Special ranges had driven sales, and put the company in a strong position in the approach to Christmas.
The company said new products – including sherry trifle gateaux and mini steak-and-ale pies – are set to be favourites in the crucial trading period.
Earlier, Asda said it will create more than 3,500 jobs through new stores, 2,400 through its home shopping service, 100 jobs in new pharmacies and 1,500 through doubling staff at the acquired Netto stores.
The Netto acquisition will add around one million square feet and create an Asda Supermarkets division of around 170 stores.
The conversion programme, which will start in the first quarter of 2011, is expected to be completed by this time next year.
Asda employs 175,000 staff and operates 383 stores across Britain. It estimates it has 18 million customers a week.
Asda’s update comes as its American parent company, Walmart, posted a 9% rise in net income to US$3.44bn US dollars £2.14bn) and raised its full-year outlook.