Asda updates on Christmas trading and Q3 preparations

• Q3 like-for-like sales (excluding fuel) decline by 0.7% compared to the same period in 2020
• Like-for-like sales remain resilient on a two-year basis with growth of 2.0% compared to Q3 2019
• Asda increases festive product volumes, charters its own cargo ship and boosts grocery home delivery capacity to 1m weekly slots ahead of the peak Christmas shopping period   

Asda today updated on its Q3 trading performance and outlined the proactive steps it has taken to ensure customers can buy their favourite festive products this Christmas.

The trading quarter, which covered the period from 1^st July to 30^th September, saw like-for-like sales excluding fuel decline by 0.7%. This is compared with the same period last year, during which time sales were boosted by the ongoing social distancing restrictions, which resulted in more meals being consumed at home.

Asda’s like-for-like sales on a two-year basis remain resilient with growth of 2.0% and food sales were up by 3.4% compared with Q3 2019. The lockdown trend of customers treating themselves to premium own-label products continued and Asda has added more than 200 new products to its ‘Extra Special’ range this year in response. This investment in quality has helped make Extra Special the fastest-growing premium range of the Big Four supermarkets and discounters, growing ahead of the total market by 8%, according to Kantar Worldpanel. ¹

Demand for online groceries softened slightly during the quarter, with sales down by 2.7% on the same period last year as more customers returned to shopping in store. However, online sales remain significantly higher than pre-pandemic levels, up by 80% on the same period two-years ago.

The supermarket also enhanced its online offering with the launch of a one-hour ‘Express Delivery’ service in June giving customers faster and more convenient delivery options. The opportunity to shop Asda’s full online range for delivery in an hour has proved to be hugely popular with customers and has since been rolled out to 147 stores. Asda has also expanded its rapid delivery partnership with Uber Eats to more than 300 stores.

Asda’s like-for-like clothing sales increased post-lockdown, up by 1.2% in Q3 compared to the same period last year, with the back-to-school range proving to be popular with customers. Like-for-like general merchandise sales were 3.1% down on Q3 2020 – a period in which sales were boosted by lockdown-related spending on homes and gardens.

Asda has also updated on the rollout of its ‘Asda On the Move’ convenience stores on EG Group forecourt locations, confirming that 30 sites had opened so far, substantially increasing the number of customers who can access the supermarket’s great value products and prices in convenient roadside locations.

In a call with investors, Asda said it was successfully navigating the industry-wide supply chain challenges and highlighted the proactive steps it has taken during recent months to help ensure its shelves are stocked with everything shoppers need for Christmas.

These measures include increasing the volume of turkeys and pigs in blankets in store compared to last year, as well as building extra stock of festive products in depots such as mince pies, confectionary, Christmas cakes and puddings. In addition, the supermarket chartered its own cargo ship to protect the availability of key festive products including festive decorations, toys, clothing and gifts.

Asda has also recruited 15,000 temporary colleagues to serve customers during the busy Christmas period and increased the capacity of its grocery home delivery service to 1m slots in the final week before Christmas – hitting a goal set in Q3 2020 and up from 765,000 slots in Q4 last year.

Mohsin Issa CBE and Zuber Issa CBE said: “We know how much Christmas means to our customers, especially after some missed out on celebrations with friends and family last year. Our colleagues have pulled out all the stops during the last few months to make sure customers can get their favourite festive products at Asda and enjoy the Christmas they deserve – and we’d like to thank them for their continued effort and commitment to serving our customers.

“Looking ahead, our plans to rollout Asda on The Move remain firmly on track and will open up significant growth opportunities in the convenience channel. We are also highly encouraged by the early uptake of our Asda Rewards loyalty programme and look forward to bringing this trial to customers in more stores next year.”

Asda recently announced the appointments of Lord Rose as Chairman and Dame Alison Carnwath as a non-executive director. The new appointments significantly strengthen Asda’s board and demonstrate a clear commitment to the strong governance of the business by its owners, the Issa brothers and TDR Capital LLP.

In addition to strengthening the board, Asda also bolstered its senior executive leadership team with the appointments of Meg Farren as Chief Customer Officer and Liz Evans as Managing Director of its George clothing division during the quarter. Meg joined from KFC, where she was the Chief Marketing Officer for the UK & Ireland, while Liz was previously CEO of family lifestyle brand Fat Face.

_{¹ (Kantar Worldpanel 12-weeks ending 31st October 2021)}