Today, Walmart has published its earnings for the first quarter of 2020 including financial results for its UK business, Asda, for the period 1st January to 31st March 2020*.
The period, which incorporates the weeks of ‘stock up’ activity seen across the UK before ‘lockdown’ on 23rd March, saw Asda’s like for like sales, excluding petrol, increase by 3.5% compared to the same period in 2019.
During this unprecedented period, Asda provided an extensive range of support to colleagues and local communities. This included being the first retailer to confirm it would provide full pay to any colleague that needed to self-isolate, offering over 150,000 home delivery slots to extremely vulnerable customers and donating £5m to FareShare and Trussell Trust.
The supermarket experienced a surge in demand for home shopping deliveries, with Asda.com receiving more than 3,500 visits per minute during the week commencing 18th March.
Asda also noted a significant decline in demand for non-essential items, such as fashion, fuel and general merchandise and was required to close 33 of its Living Stores in March in response to Government guidance on non-essential retail.
The supermarket also saw its smaller stores, located in the heart of communities, perform strongly as customers preferred to shop locally and avoid travel during the early weeks of lockdown.
Speaking on Asda’s performance as part of the overall Walmart International portfolio and recognising the significant impacts of Covid-19 on consumer spending and behaviour across all markets, Brett Biggs, CFO of Walmart said:
“ As March and April progressed, we saw economic pressure, channel shift and mix shifts in most of our markets, with significant April sales declines at Flipkart, Africa and the U.K., although the U.K. was mainly fuel related.“
Roger Burnley, CEO and President of Asda said;
“Reflecting on the last quarter – to March 31st feels a lifetime ago in the ever-changing landscape we find ourselves currently operating in. But, first and foremost I want to extend my absolute and heartfelt thanks to our colleagues who have risen to the challenge of this pandemic and served our customers so well in unprecedented circumstances.
“It has become increasingly clear that Covid-19 is set to be part of our lives for months to come and we know that customers have moved on from an initial worry about the virus, to more longer term concerns about the implications of lockdown on their family, wellbeing and finances. And, as more people return to work, they are juggling the demands of cooking more and having less time to shop for groceries. Our latest income tracker data shows that household incomes declined 0.6% in March, the first drop since 2017 and 90% of customers told us they are worried about a depression in the economy.
“Whilst safety is still a major focus for customers, three quarters tell us they are also increasingly concerned about the price of groceries and are looking for value – and we can reassure them that Asda will meet their needs on both. However long Covid-19 is with us, we will continue to offer great value to customers, as well as investing in doing the right things to protect our customers, our colleagues and our communities - and fulfil our vital role in feeding the nation.”
With two thirds of customers still concerned around safety in supermarkets, Asda has confirmed today that it is investing in more longer term measures to support social distancing in its stores, including trialling a ‘virtual queuing’ solution at its Middleton store near Leeds, which allows customers to ‘log in’ to the queue remotely and wait in their car to enter the store. The Supermarket has also extended the capacity of its ‘Food Box’ delivery service for vulnerable customers to 10,000 boxes per day.
*The period also benefits from 29th February – leap day – which was not present in previous year.
Key Initiatives introduced by Asda in response to Covid-19
Protecting our customers is of paramount importance during this time and we have implemented extensive measures in our stores to limit contact and maintain hygiene.
- Directional signage, barriers, Perspex screens and access restrictions.
- Rolled out Scan and Go mobile to 581 stores to reduce the need for contact in transactions.
During March, we introduced three item limits on purchases to ensure fair access to products for all customers, and these remain in place on hand sanitiser and eggs.
Whilst the demand for Grocery Home Shopping accelerated at an unprecedented rate, we have expanded capacity and prioritised support for the most vulnerable.
- Expanding home shopping from 450,000 weekly slots to over 725,000 weekly slots to help support those who need to stay at home during this period.
- Written to over 250,000 extremely vulnerable customers from across England, Scotland and Wales and are now offering regular home delivery slots to over 150,000 people who are without a support network.
Our colleagues are fulfilling an essential role in feeding the nation as key workers and we take our responsibilities to protect them seriously.
- We were the first retailer to confirm that we would be providing full pay to any colleague needing to self-isolate due to Covid-19 symptoms – including those extremely vulnerable colleagues who need to be shielded for 12 weeks.
- We went further still by extending this support to colleagues who are in vulnerable groups. Through Covid-19 to date, we have supported over 26,000 colleagues in absence from work.
- For colleagues who continue to serve in our stores and depots, we have provided masks, gloves, additional hand washing facilities as well as an additional bonus of a week's pay in June as a thank you for their efforts.
- We have also been proud to welcome over 22,000 new colleagues to our stores in temporary roles to support our efforts to feed the nation.
Asda has always been proud to support the communities we serve and through Covid-19 we have worked to invest in doing the right thing.
- We have taken direct action to support foodbanks through Covid-19 with a £5m donation to support the expansion of logistics and operational support functions for FareShare and Trussell Trust – enabling them to support 3,000 charities and 336,000 vulnerable families each week access the essentials they need in lockdown.
- In store donation trollies have also provided enough food for 140,000 meals – and we thank our customers for their ongoing generosity to others during this time.
- We offered priority access hours to NHS workers and carers each Monday, Wednesday and Friday – as well as a dedicated shopping hour each Sunday morning.
- We launched the first volunteer shopping card to provide a ‘contact free’ solution for volunteers who are shopping for vulnerable people. To date, over 110,000 cards have been used in our stores.
- We have added to this offer with the launch of a 31 item ‘food box’ service targeted at those supporting vulnerable people.
- We are proud to launch our package of support for care homes, offering priority access to 3600 small care homes who we identified in our databases. Over half of these care homes have now accepted and placed 6,000 orders, which will support over 100,000 vulnerable individuals residing in these homes.
- We are donating 250,000 masks to local care homes via our community colleagues – the first of which will be distributed this week.
Working with suppliers
- We know that our suppliers are facing their own challenges and we are doing all we can to help them through this unprecedented period. This includes shortening our terms so that small suppliers receive payment immediately and providing rent holidays to our smaller tenants.
- We continue to invest to support UK farmers and the wider industry. In fresh meat, for example, where there is an abundance of steak due to the closure of the food service sector, we are offering the lowest-ever prices on our steak range, whilst continuing to pass on the full value to farmers.
- For our George suppliers we have remained committed to over 95% of our annual orders – providing certainty and clarity for suppliers during the pandemic – and where we have been required to change plans due to the significant downturn in demand we have mutually agreed to cancel orders and provide goodwill payments to suppliers within 7 working days, providing an immediate injection of cash to help them support their workforce during this time.