Supermarket chain Asda has revealed a slowdown in sales for the latest quarter, saying that the poor weather this summer hit its clothing and general merchandise sales.
The UK’s third largest supermarket chain – which is based in Leeds – revealed that like-for-like sales, excluding fuel, grew by 2.8% over the third quarter of 2023, compared with the same period last year, as it reported revenues of around £5.4bn for the period. That sales growth represented a significant slowdown after posting a 9.6% sales increase in the second quarter, however.
It came as the company was dragged back by a fall in clothing and general merchandise, which includes homeware and technology. Like-for-like sales in the division slid by 3.4% year-on-year after it was “impacted by the unseasonal weather across this period”. Sales had grown during the previous quarter.
Read more:brothers complete EG deal with Asda
Meanwhile, food sales increased by 3.2% for the quarter, as the grocery chain hailed strong sales of its Just Essentials own-brand value range of products. It comes after food inflation eased back in recent months, according to official figures, with milk, cheese and eggs among products witnessing reductions.
Mohsin Issa, co-owner of Asda, confirmed that the retailer has seen its own inflation rates come down recently. He said: “Despite inflation easing slightly, we know that many families are still struggling, as disposable income for the average household is 10% down compared to two years ago.
“Throughout the quarter we have been focused on helping customers save money whenever they shop with us, and this remains our key focus. This means keeping prices low on the products they buy the most, putting money back in their pockets via the Asda Rewards app and passing on savings whenever there is an opportunity to do so.”
On Tuesday, Asda also told investors that it has repaid a £200m loan facility used to buy 132 petrol stations and adjoined convenience shops. It has also reduced its total debt leverage. Michael Gleeson, Asda’s chief financial officer, said: “Asda has a sustainable capital structure, strong cash generation and clear strategy to deleverage over time, as the early repayment of the loan facility used to acquire the Co-op business demonstrates.”
Asda is co-owned by the Issa brothers, owners of Blackburn’s EG Group, and TDR Capital. A recent deal saw Asda buy the majority of EG Group’s UK and Ireland operations, with the brothers retaining EG’s overseas operations.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
