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Asda continues to gain market share as it benefits from the X Factor

Supermarket Pledges to Cut Cost of Christmas by £150m

  • For quarter ending 30th Sept 2009 comp (LFL) growth of 5.6 per cent (year-to-date comp 7.1 per cent), profits grow faster than sales, and price leadership extended
  • Over three years of consistent market outperformance
  • Market share up from 16.9% to 17.3% with even more customers coming through Asda’s doors.
  • Asda forecasts most competitive Christmas of the decade, and pledges to save customers £150m this Christmas
  • Colleagues thanked for their hard work with a £16m Christmas benefits package

Asda today unveiled another strong set of results, and announced it will save its customers £150m this Christmas, which it believes will be the most aggressive on price in a decade.

Over the quarter, the retailer has extended its price leadership over rivals, and seen its sales volumes accelerate as a result. This has led to continued market share gains and profit growth ahead of sales growth.

Underlying comp sales (like for like), excluding fuel, grew by 5.6 per cent during the quarter, with total sales increasing in the high single digits. Asda’s year to date comp sales have grown by 7.1 per cent.

Leading that performance across the UK have been the stores in Andover in England, Girvan in Scotland, Enniskillen in Northern Ireland and Bridgend in Wales – all top-performers in their respective countries.

The supermarket’s growth is being driven by attracting even more customers through its doors, who are spending more by putting more items into their baskets. Its market share has increased to 17.3 per cent, up from 16.9 per cent last year, according to the latest TNS data published on Tuesday.

Judith McKenna, chief finance officer, said: “Asda continues to be in excellent health, with every part of the business – food, home and leisure, and clothing – all outperforming their respective markets.

“We’ve once again taken the lead in lowering prices more quickly than our rivals and by a greater amount. More customers with fuller baskets demonstrates increasing loyalty amongst our customers, who are taking advantage of the wider choice under one roof.

“Our customers know they can trust us to have the lowest prices in the market, week in, week out. They can get great products and be served by fantastic colleagues.”

Data from Mysupermarket.com shows that Asda’s price gap is the strongest it’s been since the independent price checker started tracking prices in January 2008. That price position, along with improvements in product quality is proving to be a consistently winning formula for Asda – these results mark the 14th straight quarter of market out-performance.

Asda attributed part of its success to the growing importance of spending Saturday nights in with all the family. More than nine million of its customers tune into X-factor each weekend, which has led to an increase in the popularity of takeaway foods from its in-store counters.

It has also seen strong growth following targeted in-store events that have driven sales. During a two-week baby event 40 per cent of new mums visited an ASDA store. As a result it sold more than a year’s worth of car seats in the first week, and thanks to a market-leading 2 for £18 on jumbo boxes of nappies, 1 in 4 babies’ bottoms are now dry thanks to Asda.

The online business continues to go from strength to strength with grocery home shopping sales increasing by nearly 50 per cent over the quarter. It has also extended its reach into more postcodes including those in London, North Devon and Norfolk; as a result 97 per cent of all UK households now have access to Asda’s low grocery prices online.

The in-store collect service for ASDA Direct has also been extended to 150 stores, enabling customers to purchase products online and collect them in store at a time that suits them.

Posted in News & Blogs on 12 November 2009
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