Asda like-for-likes rise 0.5% in second quarter driven by Everyday Low Pricing

The sales increase in the 10 weeks to June 30, which excludes petrol, builds on Asda’s 0.1% sales rise in the first quarter 0.1%.

Asda said its Everyday Low Pricing [EDLP] strategy, in which it is making a £1bn investment, has enabled it to maintain “strong price gaps to rest of the Big Four”.

It said that despite “continuing challenging trading conditions” it has increased its market share year on year by 14 basis points.

Asda president and chief executive Andy Clarke said the grocer has been “quick to recognise the structural changes taking place in the UK market”. In November 2013, Asda set out its five year strategy to “redefine value retailing” and has this year conducted a dramatic restructure of store management to better reflect the growth of multichannel.

Clarke said: “The last quarter has seen unprecedented change within the food retail sector, and whilst I do not underestimate the challenge currently presenting retailers, I am proud that our business identified and put plans in place to respond to these changes early. We have a clear five year strategy based on Everyday Low Prices and we continue to implement that strategy with agility and pace.”

Clarke added Asda’s EDLP policy “increasingly appeals to ever savvier customers who are attracted to clear and simple pricing”.

Asda’s said its share of the online grocery market stands at 18.4%. Online sales were up 20% in the quarter and the UK’s second largest retailer said its click-and-collect offer, which accounts for 10% of online sales, continues to drive ecommerce growth, attracting more than 20,000 customers a week. Asda expects click and collect to account for 30% of online sales in the next five years.

In the last three months Asda extended the hours customers are able to collect their shopping on a Sunday by four hours. It said this drove an uplift of 20% uplift on the day’s orders.

Asda’s fashion label George is now the second largest clothing retailer by volume in the UK. The grocer extended the brand in the past 12 months to include the George Home range, which has delivered “double digit” growth in the quarter.

Clarke also said the retailer would continue to innovate in store. It will roll out 86 remodels and 87 refurbishment projects in its supermarkets in 2015 and developing three new ‘format trials’ in larger stores over the next six months.

He said that he was “confident” in the future of large store formats but that the space needs to be used innovatively and create new “reasons to visit” for customers.

Clarke said: “I am pleased with our performance in the quarter and our business has shown that it is well positioned to meet the demands of a challenging market. However, I’ve been in this business for too long to measure success by quarters and we remain on a long term journey.

“Innovation, low prices and customer service remain at the heart of our business and over the coming months and years we will continue to implement and build on this successful strategy as we constantly look at new and improved ways to run our business.”