Asda has reported like-for-like sales growth in the mid-single digits for the first quarter as its policy of lowering prices, whilst simultaneously introducing new premium ranges attracts more shoppers.
This was the fourth successive quarter of like-for-like sales acceleration, reported in a statement on Tuesday to coincide with US parent company Wal-Mart's quarterly results.
"There's still plenty more to do, but with interest rates on the rise again, people are feeling the pinch, so lowering prices is as important now as it's ever been," Asda chief executive Andy Bond said.
Asda's internal tracking system has flagged up 1.5 million new customers since mid-2005 with half of those taken from rivals, said Charles Holley, finance chief at Wal-Mart's international division. Like-for-like sales of food, general merchandise and its George clothing line all rose in the first three months of the financial year.
And Asda was a highlight as international operations in general proved a high point for the world's largest retailer. International sales rose 18.5 per cent in the quarter, compared with an 8.3 per cent rise in total first-quarter sales to $85.4 billion (43.2 billion pounds).
Bond said Asda had tripled its range of organic food and doubled its premium food range. "I'm delighted with these figures as they show our common sense approach to retailing is paying dividends. The combination of lower prices, broader product ranges, cleaner stores, and shorter queues is a simple, but winning formula. It's not rocket science, but it's exactly what people want, that's why we've attracted a million more customers in the last year,” he added.
Asda's plans to reduce food packaging by 20 per cent before the end of 2007 are said to be "on target".
