Asda updates on Q2 trading
Continued focus on value drives 9.6% growth in Q2 like-for-like sales
Quality investments in key own-label categories drive 14.7% Q2 sales growth year-on-year
Kick off of integration of acquired Co-op stores and completion of EG UK&I acquisition on track for Q4
Revenue (excl fuel)
Like-for-Like sales (excl fuel)
1st April – 30th June 2023
Asda has today reported a 9.6% increase in like-for-like sales during the second quarter, compared to the same period a year earlier, and up 1.8% up on the previous quarter, due to the continued focus on supporting families during the cost-of-living crisis. The supermarket’s revenues, excluding fuel, were £5.4bn for the quarter.
Asda’s continued investment in driving value for its customers through a combination of low prices and improved quality helped to drive a 14.7% increase in own-brand sales during the quarter compared to a year earlier.
Just Essentials, Asda’s value range launched last year specifically to help families shop on the tightest budgets, is now firmly established as the number one value range in the market with 20.2% market share* and sales during the quarter were 87% up year-on-year. More than 22m customers have now bought Just Essentials products since the range launched in May 2022.
With the latest Asda Income Tracker showing that 40% of UK households had negative disposable income across the quarter - meaning their take home pay did not cover spending on bills or essentials – Asda redoubled its value initiatives to provide extra support for customers during the quarter.
Commenting on the supermarket’s performance in the quarter and ongoing efforts to support consumers through the cost-of-living crisis, Mohsin Issa, Asda’s co-owner said:
“We know that thousands of families continue to struggle with the cost of living, and we’re committed to doing all we can to support them. This quarter, we have locked the price of over 500 everyday items to help families keep a handle on their budgets, as well as reducing the price of over 200 own–label items by an average of 9% - including fresh fruit, vegetables, cupboard staples and ready meals.
“It’s this constant focus on keeping our prices low that has seen us win the Grocer 33 pricing award for the 26th consecutive year.
“In addition to investing in value on the shelf, we’re also the only major retailer to give money back to customers every time they shop through our Asda Rewards loyalty app. More than 5m customers regularly use the app and have earned over £200m since launch to spend in store or online.
“We have also extended our hugely popular kids eat for £1 cafes offer until the end of the year. I am incredibly proud that we have been able to serve over two million meals to kids since we launched the initiative last June, investing £1.3m to date to keep the prices pegged at £1.”
Asda also updated investors on the performance its George, General Merchandise (GM) and Online Grocery divisions during the second quarter. Both its clothing and GM business outperformed the wider market during Q2, with like-for-like sales growth of 2.8% and 6.3% respectively compared to the same period of 2022. A credible quality and style offer, particularly in dresses and swimwear, meant George maintained strong full price sales during the quarter, whilst in GM, Asda’s evolved toy offer through the ‘Big Asda Toyshop’ offer delivered strong sales.
In online grocery, Asda continues to perform strongly, delivering an average of 800k orders per week across the quarter and maintaining its position as the UK’s second largest online supermarket. The investments in improving the shopping experience for online customers and rolling out a comprehensive quick commerce offer were recognised at the recent Grocer Golds awards, where Asda was named Online Supermarket of the Year.
In April, Asda moved to increase pay for its 123,000 hourly paid retail colleagues to £11 per hour, with a second increase to £11.11 given in July – an investment totalling £141 million.
Michael Gleeson, Asda’s Chief Financial Officer, said: “The growth in like-for-like sales across the quarter reflects the strength of our customer proposition. Our focus on providing great quality and affordable food, stylish clothing and homewares from George, and the ability to shop when and how they like, is clearly resonating with our customers.
“Whilst we continue to see inflation headwinds in our cost base, wherever we are seeing reductions in commodity prices – such as wheat and milk – we are doing the right thing to pass those savings to our customers wherever we can, particularly in our own brand ranges. We have also invested to support our colleagues, increasing the rate of pay for 123,000 hourly paid store colleagues to £11.00 in April and again to £11.11 per hour in July.
“As well as investing to support the immediate needs of our customers and colleagues, we continue to invest in driving the long-term sustainable growth of our business in areas like loyalty and convenience. The integration of 119 stores acquired from Co-Op is now underway and the completion of our acquisition of the EG UK&I estate is on track to complete in Q4– allowing us to bring Asda’s value in fuel and groceries to even more communities.”
The supermarket also shared highlights from its latest ESG report published yesterday which chart progress against a range of targets in 2022. These include a notable 40% reduction in scope 1 and 2 carbon emissions compared to the 2015 baseline. The full report is available to view here.