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Flat Q4 LFL sales for Asda

Asda has announced new investment to build George's international reach and revealed that like-for-like sales growth slipped back in the final quarter of 2012 as shoppers kept a tight rein on spending. The retailer said it was proud however of its performance for 2012 as a whole.

LFLs fall in line with average ticket price:

In Q4 Asda's LFL growth excluding fuel was 0.1% in the 14 weeks to January 5th, reflecting flat footfall and a 0.1% fall in average ticket price, with the strongest performances being delivered by core grocery, apparel and home. Sales were pulled down by Asda's focus on reducing the cost of everyday groceries to reinforce its price positioning in an inflationary market. Total sales rose by 2.2% for the quarter. For the full year Asda's sales rose by 1% excluding petrol.

"Increasing access points to Asda's value":

Commenting on the results, Asda president and chief executive Andy Clarke said: “We’re pleased with our results in a tough market. We continued to grow our sales while also investing in holding down the price of essentials, increasing access points to Asda’s value and putting money back in customers’ pockets when they need it the most.”

Online growth:

Asda's prioritisation of digital investment resulted in an 18.8% year-on-year uplift for the quarter and its strongest online Christmas ever, helped by the development of mobile apps and the roll out of click & collect for both groceries and general merchandise. Click & Collect is now regularly used by over half of Asda's online shopper shopper base.

Expansion for George:

Asda has announced it now plans to expand delivery capability of into Europe and intends to be fully operational in 24 countries by the end of the third quarter, following a successful trial in Ireland. Asda will also ramp up its store presence overseas with franchise George stores opening in the UAE, Jordan, Kuwait and Qatar later this year.

Operating income increases despite cost pressures:

While gross profit for the quarter increased, higher property taxes and insurance caused operating expenses to move ahead of sales. Nonetheless, Asda managed to increase operating income by focusing on delivering its "We operate for Less" model. This programme will now be rolled out to other Walmart markets.

Tough 2013 expected:

Comenting on Asda's prospects Doug McMillon, President and CEO, Walmart International said "There is little doubt that the U.K. economy will remain a pressure point for our customers, who will look for value even more. Our combination of EDLP and strong private brands gives us a point of differentiation in the marketplace and will help us grow share."

Source : IGD

21 February 2013
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