Asda like-for-likes rose 1% in its fourth quarter as the Asda Price Guarantee drove sales over Christmas.
The performance for the 14 weeks to January 7 has provided further evidence of Asda’s return to form, as Kantar also revealed this month it was growing sales at the fastest rate of the top four supermarkets.
Clarke declared the grocer had “won Christmas” thanks to an increased number of baskets worth more than £40 and increased use of the Asda Price Guarantee. Transaction numbers grew 10% in the quarter and the retailer saw a “big spike” shortly after the New Year on January 3.
Asda’s Extra Special brand, created in partnership with cookery school Leiths, pushed sales in the quarter, and was the fastest growing premium own label in December.
Online sales grew almost 20%.
Asda president and chief executive Andy Clarke said the grocer would continue to listen to customers and in 2012 will focus on price, quality, and service.
Asda said it will continue a “relentless” focus on price, by ensuring an efficient supply chain. The retailer is in the “early stages” of developing relationships with the likes of suppliers Proctor & Gamble and Unilever to “leverage some of the volume” offered by parent company Walmart, finance director Rob McWilliam.
Clarke added: “There’s more to come with APG [Asda Price Guarantee] - we have only just scratched the surface of what the APG can do for our customers – offering real pricing transparency and a guarantee when every penny or pound matters.”
Its 2012 plans include investing more than £15m in rolling out its Butcher’s Selection range across the entire meat range this year, while £1.6m will be spent on developing fish counters and bringing the ‘chosen by you’ approach - which surveys customer responses to products - to the range.
Asda has also put aside £4.5m to invest in rolling out its Community Life programme - which sees Asda stores integrate with the local area through a dedicated staff member - across all stores this year, and will continue funding colleague training programmes, including Apprenticeships.
Parent company Walmart said Asda’s expenses grew slower than sales, excluding Netto stores. This enables it to invst in a “higher level” of customer service over Christmas.
Last year Asda acquired Netto stores in the UK. Asda ended the year with 541 stores in total, which breaks out to 32 Supercentres, 309 superstores, 27 Asda Living stores and 173 supermarkets.
Clarke said: “2012 will continue to be a year of focus. We recognised the economic climate is still very challenging. Our focus will be very clearly on price leadership. We will invest in quality on food as well as general merchandising and apparenl.”
Asda intends to open 0.5m sqft in 2012, down from 1.7m sqft in 2011 which included the conversion of Netto stores.
Asda said it lost out to “competitor promotions on price” last autumn, when Tesco’s Big Price Drop launched, but won back shoppers in the run up to Christmas. Clarke said Asda had had “momentum” since Christmas indicating current trading is strong.
Shore Capital analyst Clive Black said Asda had taken trade from Morrisons, among others. He said: “We see no reason why Asda should not maintain robust relative trading for much of this year, given the momentum that being in the groove brings. In this respect, we have to express a concern that Asda’s strong relative momentum has for Morrison’s in particular, given the strong degree of store overlap between the two brands.
“Indeed, we believe that the deceleration in trade from Morrison over the last couple of months directly corresponds with Asda’s outperformance to some degree.”
Conlumino managing director Neil Saunders said: “Asda’s credentials on price are long established and out of all the major grocers it is best positioned to take advantage of the more frugal consumer mindset by capturing the spend of those wishing to trade down.
“This has helped it win share from Tesco over the period and has also been beneficial in mitigating defections to the deep discounters.”