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Asda Q3 sales rise and 7,500 new jobs

Asda reported a return to underlying sales growth in its fiscal third quarter, helped by a focus on low prices and the relaunch of its core own-brand grocery range.

The country's second-biggest supermarket chain behind Tesco also said on Tuesday it would create over 7,500 jobs next year by opening new stores, growing in home shopping, and through its purchase of Netto UK.

Sales at stores open over a year rose 1.3 percent in the three months ended September 30.

That compared with a 0.4 percent fall in the second quarter and is the first increase since the fourth quarter of 2009.

Asda has lagged sales growth at its major rivals for most of this year, hit by a step up in promotions which the chain says has clouded its low-price message, as well as growing demand for premium ranges which has favoured upmarket rivals like Waitrose.

Asda responded in April by launching a price guarantee offering to refund shoppers the difference if they can find their shopping cheaper elsewhere.

In September it announced a 100-million-pound relaunch of its core own-brand range, and it has also expanded its premium Extra Special range.

"The new initiatives we have put in place ... are all increasing the number of customers coming through our doors," Chief Executive Andy Clarke said.

Asda's underlying sales rise is in line with the increase reported by Wm Morrison Supermarkets, the fourth-biggest grocer, for the 13 weeks to October 31, but below the 2.1 percent rise posted by industry No.3 J Sainsbury for the 16 weeks ended October 2.

Asda said third-quarter profits grew ahead of sales, without giving further details.

A spokesman said it planned to open 10-15 new food stores in 2011, in line with previous years, and extend five others.

Parent Wal-Mart reported a higher quarterly profit and raised its full-year earnings forecasts, despite a fall in U.S. same-store sales.

Source : Reuters

16 November 2010
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