Asda returns to growth as value ranges lure new shoppers

The supermarket giant said like-for-like sales rose 4.7% during the three months to the end of September – its best result since the first quarter of 2021. 

Total revenues excluding fuel hit £5.2bn during the three-month period.

Asda, which was acquired by the billionaire Issa brothers and TDR Capital in October 2020, said its entry-level Just Essentials range attracted 400,000 new shoppers to its supermarkets across the quarter. 

The grocer added 141 new value lines to the range between July and September, including rice, pasta, tinned tomatoes and tuna, taking the total number of Just Essentials products to 270.  

It said 70% of the cash spent on Just Essentials during the quarter came from new customers switching from “more expensive supermarkets”. 

Asda is also keeping prices low on 250 more basket staples through its ‘Dropped & Locked’ campaign, freezing prices until the end of 2022. 

Its Asda Rewards loyalty scheme, which offers members money off at the tills rather than points, has already attracted 2.7 million active users despite only rolling out nationwide in August. 

Co-owner Mohsin Issa said: “The financial pressures on families across the UK are worsening and they are looking to us for help. Asda has a longstanding reputation for providing customers with outstanding value and it’s more important than ever that we deliver this for them.

“We’re absolutely committed to ensuring that Asda remains the best value traditional supermarket while introducing new value initiatives such as Asda Rewards that can make an immediate difference to customer budgets.”    

During the quarter, Asda struck a deal to acquire 132 petrol forecourt convenience locations from the Co-op for £600m. 

The acquisition, which was completed last month but remains subject to regulatory approval, will accelerate Asda’s plans to build a sizable c-store business. 

Earlier this week, the grocer opened its first standalone convenience shop under the new Asda Express fascia in Sutton Coldfield. A second will open in Tottenham Hale in December and 30 more sites are planned for next year.

Mohsin Issa added: “Although we have more than 600 stores across the UK, there are still many communities that don’t have an Asda nearby. We want to change this and bring Asda’s great products and value to even more people through these new stores.”

Looking ahead to the crucial festive trading period, Asda said it has boosted online capacity to more than 1 million home delivery and click-and-collect slots during the week before Christmas.

It also plans to recruit 6,000 temporary staff to work during the peak holiday period.