Ahead Of Sainsbury's Takeover, Asda Says Results Are On Track

By Donna Ahern
Ahead Of Sainsbury's Takeover, Asda Says Results Are On Track

Asda, the British supermarket arm of Walmart that is set to be acquired by Sainsbury's, posted a 13% fall in profit in 2017, a performance which it said was in line with expectations and showed its recovery was on track.

Sainsbury's and Asda announced plans to combine in April in a deal which will see Britain's no.2 and no.3 supermarkets respectively overtake Tesco as Britain's biggest supermarket group.

The deal comes just as a turnaround plan for Asda gains momentum, with Asda saying it returned to underlying sales growth in 2017, posting sales up 0.5 percent, a big improvement on the 5.7% fall it reported last year.

Price Investment

Asda said it had benefited from investing in lower prices for customers and improved service in stores and online.
Statutory accounts for Asda Group Limited published on Thursday show that operating profit came in at £735.4 million compared to the £845.3 million it made in 2016.


"Our 2017 accounts reflect a solid performance and a strong, well-managed business," said Asda President and CEO, Roger Burnley.

"During the year momentum returned driven by a series of planned investments in lowering prices, further improving quality and innovation in our Own Brand ranges and providing an even better shopping experience whether in store or online."

Market Share

Kantar Worldpanel data for the 12 weeks to 20 May 2018 revealed that Asda was one of the strongest performers in recent weeks, with year-on-year growth of 2.8%.

The retailer now sits on 15.4% market share, just 30 basis points behind Sainsbury's.


“With year-on-year sales growth of 2.8%, Asda is also performing ahead of the grocery market," commented Chris Hayward, consumer specialist at Kantar Worldpanel. "The retailer continues to prove popular with young families, while an increase in spend per trip – up £0.56 to £26.88 on average – has helped buoy sales.

"Asda’s e-commerce offering is also proving a winner among shoppers – the grocer’s online channel saw sales rise by 7.6% year-on-year.”

News by Reuters, edited by Donna Ahern. Click subscribe to sign up for the Checkout print edition.

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