Asda Just Essentials Meat

Source: Asda

Asda credited its Just Essentials value range for driving the performance

Asda has reported a near double-figure increase in like-for-like sales during the second quarter, with the supermarket claiming its investment in more affordable prices has paid off.

Sales were up 9.6% year on year, including a 14.7% increase in own brand sales. Sales were also up 1.8% on the previous quarter.

The supermarket’s revenues, excluding fuel, were £5.4bn for the quarter, up from £4.9bn in the same period last year.

Asda credited the success of its Just Essentials budget range, which first hit the shelves early last summer, for spearheading the improved performance.

It said it was now “firmly established” as the number one value range in the market, with a 20.2% market share, and sales during the quarter up 87% year on year.

More than 22 million customers had bought Just Essentials products since they made their debut in May 2022, the supermarket said.

Last week, The Grocer revealed the number of Just Essentials lines had shrunk by 8%, including the removal of some everyday food products, with experts raising questions about the impact of the budget range on Asda’s profit margins.

However, Asda co-owner Mohsin Issa stressed today the retailer remained determined to support families in the cost of living crisis, with the latest Asda Income Tracker showing that 40% of UK households had negative disposable income across the quarter.

“We know that thousands of families continue to struggle with the cost of living, and we’re committed to doing all we can to support them”

“This quarter, we have locked the price of over 500 everyday items to help families keep a handle on their budgets, as well as reducing the price of over 200 own-label items by an average of 9% – including fresh fruit, vegetables, cupboard staples and ready meals.

“It’s this constant focus on keeping our prices low that has seen us win the Grocer 33 pricing award for the 26th consecutive year.

“In addition to investing in value on the shelf, we’re also the only major retailer to give money back to customers every time they shop through our Asda Rewards loyalty app.

“More than five million customers regularly use the app and have earned over £200m since launch to spend in store or online.”

Asda CFO Michael Gleeson said: “The growth in like-for-like sales across the quarter reflects the strength of our customer proposition.

“Whilst we continue to see inflation headwinds in our cost base, wherever we are seeing reductions in commodity prices – such as wheat and milk – we are doing the right thing to pass those savings to our customers wherever we can, particularly in our own brand ranges.

“We have also invested to support our colleagues, increasing the rate of pay for 123,000 hourly paid store colleagues to £11.00 in April and again to £11.11 per hour in July.”