Asda has toasted its first increase in quarterly sales for three years on the back of a successful Easter, the return of inflation and early signs that its turnaround efforts are beginning to work.
The supermarket, which has suffered falling sales over the past 12 quarters, has eked out a positive result with sales rising by 1.8 per cent in the second quarter of the year, reports the Telegraph.
The sales uptick is a dramatic turnaround from the 7.5 per cent slump Asda posted this time last year in what was the grocery chain’s worst ever result.
Sean Clarke, who took the reins from Andy Clarke last year, said that the supermarket had attracted 275,000 new customers during the period. But while he acknowledged that progress had been made he struck a note of caution by saying “we know we need to continue to up our game to be in the best shape possible”.
Asda said that it was boosted by its most successful Easter on record, with total sales over the period jumping by 16 per cent. Stripping Easter out from the three months to June 30, total sales rose by 0.7 per cent.
During the quarter food inflation rose to around 2.6 per cent, according to industry figures by Kantar, as shop prices increased to cover the rising costs of staple grocery items such as butter, fish and lamb.
Walmart boss Doug McMillon said that he was “encouraged that the UK delivered positive comparable sales” and said that he had visited Asda in June to “see the progress being made. ”
“Customers are responding to investments in price and store experience by visiting the stores more often and increasing their basket sizes,” Mr McMillon added. “There’s still much more to be done, but we’re clearly headed in the right direction.”
Since moving from Walmart China to Asda Mr Clarke has focused his revamp of the supermarket on targeted price reductions. He has also culled the number of products on shelves by 25 per cent and introduced a “Farm Stores” value food brand, in order to sharpen Asda’s competitiveness against Aldi and Lidl.
“For the past year, Asda has primarily been focused on fixing the basics under the tagline ‘new reasons to shop at Asda’,” said Ray Gual of Kantar Retail.
The improved sales performance comes as the supermarket begins a consultation with more than 3,000 staff over possible redundancies or dramatically lower working hours at 18 underperforming shops.
The staffing changes follow a wider industry trend among retailers to overhaul their staffing costs in the face of rising wages and a change in shopping habits.
Earlier this month, Asda revealed its worst full-year results since it was taken over by Walmart in 1999 with profits tumbling by 19 per cent to £657.2m last year.
Meanwhile Walmart reported a 2.1 per cent increase in total sales to $123.4bn (£95.9bn), helped by strong online growth in its US business.