Asda has posted its seventh consecutive quarter of sales growth as parent company Walmart hailed the performance of own-label lines and its online business.
In the week that the Competition and Markets Authority (CMA) is expected to reveal its provisional findings on Asda’s proposed merger with Sainsbury’s, the supermarket giant revealed that it registered a 1% uptick in like-for-like sales during its fourth quarter. Net sales grew by 2.7% year on year.
Transaction numbers advanced 0.7% across the 13 weeks to December 31, while the average basket size edged up 0.3%.
However, operating income decreased again during the quarter as Asda continues to invest in its turnaround plan.
Walmart said sales performance was driven by Asda’s “continued strength in grocery with increased private-label brand penetration”. It added that online grocery sales were “strong” in the quarter.
Asda boss Roger Burnley said 2018 had been “another challenging year” for UK retail, but hailed the “positive momentum” the grocer had built during the year.
He said: “During the fourth quarter, our own brand continued to grow ahead of the market with even more customers enjoying innovative products within our Extra Special range.
But he cautioned: “The year ahead looks no less turbulent than the last, with uncertainties around Brexit playing on our customers’ minds. Whilst I am pleased with our performance in 2018, we must remain focused on ensuring the long-term, sustainable success of Asda for our customers.”
Burnley said in such uncertain times, retailers “have to be prepared to innovate and challenge their status quo if they want to continue to remain relevant and deliver for their customers who rightly demand great value”.
Asda is hoping to merge with big-four rival Sainsbury’s in a £13bn deal as it attempts to tackle such challenges head on.
The CMA has been carrying out an in-depth investigation into the proposed tie-up and the impact it could have on competition.
A number of the duo’s rivals, including Lidl and Waitrose, have warned that prices could rise as a result of the mega-merger, despite Sainsbury’s and Asda insisting the deal would lead to a 10% drop in prices on grocery staples.
The National Farmers’ Union has also raised fears the deal could hit producers’ margins and ultimately impact food quality and choice.
The provisional findings of the CMA’s phase two investigation are expected to be released this week.