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Asda updates on Q2 trading and announces plans to roll out Asda On the Move

    September 3, 2021 11:45am
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    • Q2 like-for-like sales (LFL), excluding fuel, declined by 0.7% between 1st April and 30th June 2021 compared with the exceptional sales seen during the first lockdown in the same period last year
    • Two-year LFL sales growth excluding fuel remained resilient, up 3.1% as more meals continued to be consumed at home
    • 28 new Asda on the Move convenience stores will open on EG Group forecourts this year with a target of 200 by the end of next year and the ambition to roll out more sites in 2023
    Q2 Revenue excluding fuel (m)Q2 Adjusted EBITDA1-year LFL comparison (excluding fuel)2-year LFL comparison (excluding fuel)

    Asda has today announced significant plans to expand in the convenience market by partnering with EG Group to launch 28 new Asda On the Move stores this year, up to 200 sites next year and the ambition to roll out further stores in 2023.

    The launch follows the successful trial of five Asda On the Move stores, which have opened on EG Group forecourt sites since last October, as part of the supermarket’s partnerships strategy to help customers complete more shopping missions in one location.

    The Asda On the Move rollout will begin next month, with sites opening in Knowsley, Crewe, Skelmersdale and Holtspur. Asda will supply the products on a wholesale agreement to EG Group, which will own and operate each site.

    Each site will be up to 3,000 square foot in size and stock up to 2,500 products, including a selection of Asda’s premium ‘Extra Special’ range and a more extensive range of fresh produce and chilled lines than is traditionally found on fuel forecourts. They will also include foodservice offerings from EG Group and their partner brands such as Greggs and Subway.

    Asda’s move into convenience will substantially broaden the number of new and existing customers who can access the supermarket’s great value products in convenient neighbourhood and roadside locations. The stores will open across EG Group’s existing forecourt estate in the UK and are also expected to be situated on some new-to-industry sites as well.

    The Asda On the Move plans were announced as part of Asda’s Q2 investor update today covering the period from 1st April to 30th June. The period, which coincided with the reopening of non-essential retail and hospitality, saw like-for-like sales decline by 0.7% compared with the same period last year, during which sales were boosted by the UK’s first national lockdown.

    Asda’s like-for-like sales on a two-year basis remain strong with growth of 3.1% compared to Q2 2019, as customers continue to spend more on consuming meals at home compared with pre-pandemic levels. The lockdown trend of customers trading up and treating themselves to premium products continued during Q2, with a 23% increase in like-for-like sales of Asda’s premium Extra Special range compared to 2019.

    As lockdown restrictions were relaxed and more customers returned to stores, demand for online groceries gradually eased, compared with the levels seen during the first quarter. However, this channel remains a popular choice for customers, with online accounting for 17% of total food sales during the quarter compared with 10% in Q2 2019.

    Asda’s like-for-like clothing and general merchandise sales rose by 1.4% in Q2 versus the same period in 2019, driven by the continued strong performance of general merchandise, with like-for-like sales up by 9.6% on a two-year basis as customers continued to invest in their homes and gardens.

    Meanwhile, Asda has also announced today that Anthony Hemmerdinger, COO, and Preyash Thakrar, Strategy Officer, have both left the business. Meg Farren, Chief Customer Officer, is soon to join the business from KFC and earlier this year we appointed Sam Dickson, from Waitrose as VP of Own Brand, and Carl Dawson, from M&S as Chief Information Officer. The business continues to benefit from a strong, capable internal team, supported by the shareholder group.

    Mohsin Issa CBE and Zuber Issa CBE said: “The Asda business has proved incredibly resilient in 2021, as customers continue to eat more at home and enjoy food which is both fantastic quality and great value. Our plans to rollout Asda On the Move will bring Asda to new customers, enabling them to pick up food-to-go, essentials for an evening meal, or treat themselves to premium Extra Special products from a range of convenient locations. We continue to see significant opportunities to drive innovation across the business and we look forward to working with the Asda team to execute our growth strategy.”

    John Fallon, Asda’s Chief Finance Officer, said: “As customers responded to the gradual easing of social distancing restrictions, we inevitably saw sales soften compared to the exceptional lockdown-driven demand experienced during the first quarter. Nevertheless, the continued resilience our business has been demonstrated in the positive like-for-like sales growth compared with the same period in 2019, as we were able to take advantage of a higher level of in-home consumption, satisfying customers’ needs across both food and non-food.

    “Looking ahead to the rest of the year, the first phase of the rollout of Asda On the Move is an exciting next step for the business, enabling us to supply a new convenience store offer, complementing our other store formats.”

    Other key highlights during the quarter include:

    • Asda’s price leadership was recognised by The Grocer magazine in June, when it was named the UK’s lowest-priced major supermarket for the 24th consecutive year. Keeping prices in check remains a key priority as budgets come under increasing pressure, with the latest Asda Income tracker showing households’ average weekly spending on essentials such as fuel and utilities increased by £14.20 year-on-year during June.
    • The rollout of Asda’s partnerships strategy continued during the quarter, with a particular focus on attracting younger customers. George at Asda partnered with leading fashion retailer In The Style to launch a collection online and across 100 stores. This was followed by the introduction of collections from Lee, Wrangler and Missguided.
    • Asda published its first Environmental, Social and Governance (ESG) report setting out its business strategy and confirmed it would roll out its refill proposition to four more stores this year. These stores will feature an extensive range of own-label and branded products sold in loose format.
    • Asda continued to play its part in helping the UK recover from the pandemic by opening its third in-store vaccination clinic and has administered more than 90,000 jabs from these sites to date. In addition, Asda recently backed a government scheme to encourage more young people to get the vaccine by offering them a £10 George clothing voucher if they receive the jab at one of its in-store clinics.

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