Asda sales jump as cheap range attracts strapped customers

Bloomberg

Asda reported a rebound in sales after two straight quarters of declines as the grocer focused on keeping prices low in a bid to win cash-strapped shoppers.
Britain’s third-largest supermarket chain said sales grew 4.7% in the third quarter as the grocer’s Just Essentials budget range helped attract 400,000 new customers from rival supermarkets. The average UK household is $507 worse off compared with a year earlier, according to the Asda Income Tracker.
UK supermarkets’ profit margins are being squeezed as they have not been able to pass on all their surging costs to shoppers at a time when consumers’ real incomes are falling amid the worst inflation in four decades. Shoppers are being more picky, buying own-label brands and visiting discount supermarkets Aldi and Lidl.
Traditionally viewed as one of the cheaper supermarkets, Asda is under pressure to protect its market share and prove to shoppers that its goods are reasonably priced. Brothers Mohsin and Zuber Issa acquired a majority stake in Asda with buyout firm TDR Capital last year in a £6.8 billion transaction.
Under the ownership of the Issas and TDR, Asda has pushed into higher-margin convenience stores. The company agreed to buy the gas station business of The Co-operative Group in August for £600 million and this week it opened its first Asda Express store.
Like rivals, Asda is making a push for Christmas sales, hiring 6,000 temporary staff and boosting its capacity for online delivery with slots available on Christmas Eve for the first time.