Asda 13 Week Same-Store Sales up 0.3% in Tough Market

By Ian Walker

LONDON--Asda Stores Ltd., the U.K. arm of Wal-Mart Stores Inc (WMT), Thursday reported a 0.3% rise in same-store sales for the 13 weeks ended Oct. 4, and outlined its five-year plan to invest 1.25 billion pounds ($1.99 billion) in lowering prices, improving product quality, style and design amid a tough market environment.

Asda, the U.K.'s No. 2 supermarket by market share, added that its online business remains a core part of its growth strategy and is expected to generate GBP3 billion in annual sales by 2018. Asda plans to increase the number of Click and Collect locations to over 1,000 from 218 in the next five years.

The supermarket will invest GBP1 billion in lowering prices, and GBP250 million in quality, style and design over the next five years.

It plans to expand its supermarket format and grow the number of its standalone petrol filling stations, adding that innovation in its large stores will continue, including the George 21 clothing concept and the plans announced last week that will see eight Barclays branches in stores from early 2014.

The moves are expected to increase physical access to its brand to 70% by 2018, from 53% now, particularly in London and the South East where its market share is low.

Chief Executive and President, Andy Clarke, said: "The market conditions are tough, competition is fierce and our customers' budgets are under intense pressure".

"We've continued to invest in lowering prices which has held them down for our customers while driving volume growth. This means we enter the crucial fourth quarter in a solid position", Mr. Clarke said.

Earlier Thursday Asda's parent Wal-Mart reported a 2.8% rise in fiscal third-quarter earnings, but said revenue was weaker than expected and lowered its full-year guidance.

-Write to Ian Walker at [e-mail]

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