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Asda gears up for record online Christmas as it announces Q3 results

  • Q3 like-for-like sales increase by 2.7% year on year
  • Combined Asda.com and George.com net sales increase 72% year-on-year
  • Asda sees a surge in demand for key Christmas products as customers stock up earlier than in previous years.
November 17, 2020 00:13pm
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Asda and Walmart have today published earnings for the third quarter of 2020 covering the period from 1st July to 30th September.

The trading quarter, which coincided with the end of the first UK-wide lockdown and the re-opening of the hospitality sector, saw Asda’s like-for-like sales excluding fuel increase by 2.7%.

Asda’s growth during the period was driven by strong performance in core grocery, back to school clothing and online shopping, with combined net sales for Asda.com and George.com increasing by 72% year-on-year.

The supermarket, which was recently named Online Supermarket of the Year by trade magazine the Grocer, expects this rapid growth in online shopping to continue during Q4 and has increased the capacity of its grocery home shopping service to 765,000 weekly slots in response. Asda has also extended its delivery partnerships trial with Uber Eats from 50 to 100 stores.

Asda is already seeing a surge in demand for Christmas products and ‘lockdown proof’ festive essentials as customers start their preparations earlier than in previous years. Sales of Christmas trees have increased by 83% year-on-year, festive lights by 57%, Christmas puddings by 71% and mince pies by 44%.

There are also signs that customers are preparing to celebrate Christmas differently this year with smaller gatherings rather than larger groups due to restrictions on meeting friends and family. Sales of frozen turkey crowns, which typically serve 3-4 people, have increased by 230% year-on-year.

Roger Burnley, Asda CEO & President, said: “After a rollercoaster year it’s clear our customers are already planning for a very different Christmas. We have already seen a marked shift in buying patterns with customers stocking up their freezers and cupboards with festive essentials earlier than ever before, which suggests they are getting used to expecting the unexpected but preparing to enjoy themselves as much as possible. Whatever happens during the next few weeks, we are totally focused on delivering a great Christmas for our customers during these uncertain times.”

In response to the introduction of the second national lockdown in England earlier this month, Asda introduced enhanced safety measures in all stores to provide further protection for colleagues and customers.

These included extending the hours of Asda’s Covid Safety Marshals in every store from 8am to 8pm, adding 700 new sanitisation stations at the front of stores and applying an antimicrobial coating to all trolley and basket handles to prevent the spread of bacteria.

Asda also moved quickly to shield more than 3,000 extremely clinically vulnerable colleagues employed in its English stores and distribution centres by guaranteeing to pay their contracted hours during the second lockdown if they choose not to work. This aligns with the approach taken at the start of the pandemic when Asda protected more than 10,000 vulnerable colleagues by offering them the opportunity to shield at home on 12-weeks full pay, rather than using the Government’s furlough scheme.

The significant costs Asda has incurred since the start of the pandemic have exceeded business rates relief in the year to date. These costs include making stores and distribution centres Covid-secure, providing vulnerable customers with 2.6m free home shopping deliveries between March and October and providing financial support to thousands of shielding colleagues. Asda also recruited more than 20,000 temporary colleagues during the height of the pandemic to cover sickness absence and those colleagues that were shielding.

Roger Burnley said: “Throughout the pandemic our priority has been to do everything we can to protect our customers, colleagues and our communities and we will continue to do so for as long as Covid is part of our lives.”

Although safety remains a key consideration for Asda customers, many are increasingly prioritising price and value. Almost half of respondents (46%) in the latest Asda 1000 customer survey said they expect their financial situation to worsen in the coming months and more than three quarters (77%) said they are not optimistic things will improve in 2021.

In recognition that customers are looking for outstanding value every time they shop, Asda relaunched its iconic ‘That’s Asda Price’ slogan and ‘Pocket Tap’ during the quarter as part of a £100m investment to lower prices across thousands of own-label and branded lines.

Roger Burnley said: “Asda’s heritage is anchored in providing customers with low prices and great value every time they shop and we and we can reassure them we will continue to offer this during the challenging economic times that lie ahead.”

Asda continued to accelerate its in-store partnerships strategy during the quarter by joining forces with B&Q to trial four compact DIY stores within its Asda’s superstores, with the first two opening in Sheffield and Dagenham later this year. Asda also recently announced an exclusive trial partnership with leading toy retailer The Entertainer and expanded its current trial partnership with MusicMagpie to 36 stores.

The acquisition of Asda by the Issa brothers and TDR capital remains on track to complete in H1 2021 subject to regulatory approval.

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