Asda today revealed what it called a “resilient” set of full year results, with sales up 0.1% year on year in the period ending 31 December 2022.
Owners the billionaire Issa brothers said its investments in price reductions and the launch of its Just Essentials budget range had proved a drag on profits, but stressed they were “the right thing to do”.
Asda also pointed to a much stronger second half performance with like for like sales up 5.1% compared to the previous year.
Asda was also the best performing traditional supermarket over Christmas, with sales up 6.4% in the 12 weeks leading up to 25 December, according to Kantar.
It said the momentum had carried into the new year with February’s sales up 6.8% year on year.
Asda’s sales of £20.4bn follow a series of major moves to make it more competitive, including dropping the price of more than 100 branded and own-branded lines last year by an average of 12%, as well as the launch of its Just Essentials range, which now has more than 300 products.
Asda also rolled out its Asda Rewards loyalty card nationally In August.
Mohsin Issa, Asda’s co-owner, told investors he was conifdent it was making progress towards his goal of Asda becoming the UK’s number two retailer again.
“Asda delivered a highly resilient performance last year. We took a conscious decision to support customers by investing heavily to mitigate the impact of inflation and keep prices as low as possible,” he said.
“Although this contributed to a decline in profitability, it was the right thing to do for our customers and will ultimately help to deliver long-term growth.
“We are pleased with the strong sales growth we saw in H2, driven by investments in value and quality, and this positive momentum has continued into 2023.
“As well as tackling the issues of the day, we also made good progress laying the foundations to restore Asda to the number two position in UK grocery, focusing on giving customers desirable products at affordable prices and the ability to shop with us whenever and however they like.
“Last year saw challenges facing businesses and consumers alike and I am proud of the way Asda colleagues responded to support our customers and communities.”
Yesterday, reports emerged the Issas were considering an £8bn takeover bid for the Subway fast food chain to add to their EG Group empire, despite its existing heavy debt burden.
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