Asda hails second consecutive quarter of sales growth

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Asda has posted its second consecutive quarter of sales growth as its turnaround efforts gather momentum.

The Walmart-owned grocer said like-for-like sales increased 1.1% in the 12 weeks to September 30, while overall sales rose 3.6%.

It put the results down to increased basket sizes having focused on improving its value proposition, in-store service and its online offer.

Asda’s owner did not provide a profit figure, but said its gross profit rate declined, primarily driven by commodity price headwinds as well as ongoing price investments.

In the summer, Asda posted its first quarterly sales rise for three years, as like-for-likes climbed 1.8% in the 13 weeks to July 28, ending a run of sales decay stretching back 11 consecutive quarters.

Walmart chief finance officer Brett Biggs said: “Customers continue to respond to investments in the value proposition. In fact, during the quarter, our in-store service metrics continued to improve and performance strengthened across our private brand and online grocery offerings.

“While we are pleased with the improved performance in the business, we know we have more work to do.”

Outlook

Looking ahead, Asda’s outgoing chief executive Sean Clarke said: “Right now, we are focused on delivering value for our customers across all of our ranges this Christmas and ensuring everyone gets a great experience, both in-store or online.

“The market environment will continue to be challenging into next year but we’re well placed with clear plans and a renewed level of confidence.”

Changes at the top

Clarke is preparing to hand over the reins to current chief operating officer Roger Burnley.

Commenting on the move, Walmart president and chief executive Doug McMillon said: “We’re excited to have Roger Burnley lead Asda into the future as CEO, starting next year.

“I’d like to thank Sean Clarke for the tremendous work that he has done over the past year to stabilise the business and position it for growth. Sean has done a lot for our company living in five countries over his 21-year career with Walmart.”

Burnley, who will take up the post in January next year, unveiled plans to reshape Asda’s senior management team earlier this month.

The incoming boss has drafted in Preyash Thakrar – a strategy boss from parent Walmart – to take on the role of chief strategy officer.

In the memo seen by Retail Week, Burnley revealed he has also promoted Anthony Hemmerdinger, vice-president of retail south, to the role of senior vice-president, retail operations director.