Asda sales higher despite challenging market

Asda notched up sales growth in the second quarter, despite a challenging retail market and tough competition from last year’s bumper summer.

In the three months to June 30, total sales were up 1.3% at the supermarket, while comparable sales rose 0.5%, excluding petrol.

The period benefited from the later timing of Easter, but was up against strong results last year when the World Cup and summer heatwave boosted performance.

Margins declined in part due to markdowns and investment in lower prices, as well as softer sales of some more profitable non-food items.

Chief executive and president Roger Burnley said: “If ever a case study on the impact the mood of the nation has on UK spending habits were needed, this quarter has provided it.

“Consumer confidence levels are at an almost six-year low – due in no small part to the ongoing uncertainty around Brexit and amplified by the impact of weather and tracking against national sporting events in the same period last year.

“As a result our non-food business has been challenged during the period, however we’re satisfied that our food business has continued to perform well and our online growth continues to outpace the market.”

During the period, Asda spent £22 million on refurbishing nine stores and rolled out a Scan and Go mobile option to 25 stores.

The results come the day after a group of Asda workers staged a protest in Leeds over the retailer’s new contracts.

The GMB union said workers face being dismissed in early November if they do not sign the contracts.

It said that under the new contracts, workers will not be paid for any breaks and will have to work on bank holidays and weekends.

Asda said the majority of staff had signed up to the new terms and the changes would increase the take-home pay of more than 100,000 employees.