Asda has emphasised that recovery in the UK market has not come at the expense of its operating profit margins.
A company spokesperson told just-food today: “In terms of profit we have been investing in the business but do not sacrifice operating profit to do this.
“From a growth point of view we think it is very important to have sustainable growth in the future, and not at the expense of our operating profit.”
According to the Independent, Asda’s chief executive Andy Bond said the group had grown its like-for-like sales without sacrificing any profits yesterday – a week after parent company Wal-Mart had said its UK chain had missed its profit expectations.
“Since we were acquired by Wal-Mart in 1999, our operating profit margin has been flat,” he said, according to the UK newspaper.
Asda does not report all the unit’s financial figures in the public domain, and told just-food that news of expectations can be misleading because although profits may be below targets, the retailer continues to operate well.
For the 12 month period ending 16 July, Asda showed recovery after a period of poorer performance earlier this year. Asda has lifted its share of the grocery market back up to 16.6%, marginally ahead of the 16.5% it had during July last year, according to TNS Worldpanel.
In addition, Wal-Mart revealed on 16 August that Asda, the UK’s second largest supermarket operator, posted better-than-expected sales for the second quarter of this year, rising 5%.