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Retail

Asda Sees Sales Rise 2.0% In Q4, Despite Traffic Decline

By Steve Wynne-Jones
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Asda Sees Sales Rise 2.0% In Q4, Despite Traffic Decline

UK retailer Asda has posted a 2.0% increase in net sales in the fourth quarter of the year, according to Q4 sales figures posted by its parent, Walmart.

Comparable sales were up 0.5% for the period, however, traffic to its stores was down 1.6%, the retailer said.

Asda said that during the quarter, it experienced 'improved in-store service scores', while performance 'strengthened' across its private-label and grocery offerings.

"Gross profit rate in the quarter declined, driven by ongoing price investments," it added.

Battling Back

Commenting on Asda's performance, Clive Black of Shore Capital Stockbrokers said, "We welcome the improvement in underlying trading momentum from Asda, the business recovering against favourable comparatives in a controlled and rational manner.

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"[Asda’s president and CEO] Roger Burnley points out that there is more for Asda to do to self-improve, and we fully expect progression to the group’s retail proposition, so arguably tightening the trading environment that little bit more. However, in doing so, we do not foresee Asda delivering the much-chattered-about ‘retail Armageddon’, and so gross-profit self-destruction."

In addition, Martin Lane, managing editor of Money.co.uk, commented, “Asda have taken on bargain supermarkets and come out fighting this Christmas, with an increase in sales.

"Consumers may have felt the pinch over Christmas, however, Asda looked after their customers by giving them what they wanted for less and attracted new customers with their range of free-from foods and seasonal goods."

Lane noted that Asda cannot afford to rest on its laurels, adding, "The supermarket giant needs to keep its 'Every Day Low Prices' despite inflation, to keep customers loyal and coming back for more.”

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Walmart Performance

Overall, Walmart posted total revenue of $136.3 billion for the full year, an increase of $5.3 billion, or 4.1%.

Net sales at Walmart International were $33.1 billion, an increase of 6.7%. Excluding currency, net sales were $31.9 billion, an increase of 2.8%.

"We have good momentum in the business, with solid sales growth across Walmart US, Sam's Club and International," commented Doug McMillon, Walmart president and CEO.

"We're making real progress putting our unique assets to work to serve customers in all the ways they want to shop, and I want to thank our associates for their great work this past year. We're making decisions to position the business for success and investing to win with customers and shareholders."

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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