Asda delivers strong growth in first quarter of 2021

Asda has today updated on its Q1 2021 trading performance and filed its annual statutory accounts for the financial year ending 31st December 2020 with Companies House.

The trading quarter from 1st January to 31st March, which coincided with the UK’s third national lockdown, saw Asda’s like for like sales (excluding fuel) increase by 7.3% driven by strong growth in non-food categories and online shopping.

Like for like clothing sales increased by 31% and general merchandise sales by 39%, driven by strong demand for outdoor furniture, BBQs and garden accessories, as customers prepared to host friends and families outdoor and more broadly for an easing of lockdown restrictions at the end of the quarter.

Like for like food sales increased by 3.9% as customers stocked up on core grocery lines and household staples. In addition, customers continued to embrace online shopping with total digital sales (Asda.com and George.com) up 88% year-on-year.

Asda continued to provide an extensive range of support during the quarter to colleagues and local communities impacted by the pandemic. In February, Asda became the first supermarket to support the NHS Covid vaccination programme using its in-store pharmacies, and has since administered more than 50,000 jabs from its Cape Hill, Watford and Old Kent Road stores.

Asda also moved quickly to shield more than 5,000 extremely clinically vulnerable colleagues during the third national lockdown by guaranteeing to pay their contracted hours if they chose not to work. This aligns with the approach taken at the start of the pandemic when Asda protected thousands of vulnerable colleagues by offering them the opportunity to shield at home on 12-weeks full pay, rather than using the Government’s furlough scheme.

Roger Burnley, Asda CEO & President, said: “We showed huge resilience last year in unprecedented circumstances and carried this momentum through the first quarter with strong like for like sales growth in many key categories, especially clothing and general merchandise. Whilst the closure of non-essential retail during the first quarter helped stimulate demand, our constant focus on keeping prices low, providing great quality products and developing in-store partnerships with market leading consumer brands such as B&Q, The Entertainer and Greggs, continues to resonate with customers.

“During the first quarter we continued to support our colleagues and communities impacted by the pandemic and are hugely proud of the role our pharmacy colleagues have played supporting the NHS in the Covid vaccination rollout. Although the pandemic is not over yet, there are signs that our customers are feeling much more optimistic about the future, with almost 60% of those we recently spoke to saying they are looking forward to a summer of socialising with friends and family.”

Asda has today also filed its annual Statutory Accounts for the financial year to 31st December 2020 with Companies House. The accounts for Asda Group Limited, includes the financial activities of all Asda stores, distribution centres and online operations including food, clothing, general merchandise and fuel.

Asda’s sales during 2020 (excluding fuel) increased 3.6% year-on-year to £20,313.1m (2019: £19,611.0m) primarily driven by an increase in grocery sales which offset falls in clothing and general merchandise. Like for Like sales (excluding fuel) increased by 3.5%.

Operating profit decreased by 16.7% during the year to £486.5m (2019: £584.2m) predominantly due to Covid-related costs, which included shielding more than 15,000 clinically vulnerable colleagues for 12-weeks on full pay, hiring 22,000 temporary colleagues to cover absences and manage increased demand, and providing 2.6m home shopping deliveries free of charge to shielding customers.

The annual report and accounts also note that, as part of the terms of sale of Asda from Walmart to the Issa Brothers and TDR Capital Ltd, dividend payments were made to parent company Walmart during the year comprising of £1,650.0m in cash and a dividend in specie of £1,269.5m.

The acquisition of Asda by the Issa Brothers and TDR Capital remains subject to final regulatory approval by the Competition and Markets Authority.

Notes to Editors:

Certain statements contained in this release are forward looking statements, and may discuss our future or our expectations regarding our business performance. Forward-looking statements are not guarantees of future business performance or that future events will occur, and inherently involve certain risks, uncertainties and assumptions which are difficult to predict and outside of the control of management. Therefore, actual outcomes and results may differ materially from what is expressed in any forward-looking statements, and we cannot assure you that the results of developments expressed in these statements will be realised or even if realised, will have the expected consequences to, or effects on, us or our business, prospects, financial condition, results of operations or cash flows. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Other than as may be required under applicable law, we may disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.