UK retailer Asda has booked a 6% increase in sales for the full-year and announced plans to expand into smaller stores.
Asda, the UK arm of Wal-Mart, said the growth was driven primarily by an increase in customer numbers but also higher average spend, despite the continuing backdrop of no inflation in the market.
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Sales for the fourth quarter to 9 January increased 4.6%, beating its targets for the year and quarter, the firm said today (18 February).
“Let me be clear- the final few weeks of the fourth quarter, which is our busiest trading period, were impacted by some of the most challenging weather conditions we’ve ever experienced,” CEO Andy Bond said. “As you know we have far fewer stores than our competitors, so our 18m customers have to drive a little further to get to us. Not surprisingly this meant the four weeks of snow and ice from 18 December impacted us more than any other food retailer.”
Asda, which runs 371 supermarkets, said it now plans to accelerate growth in smaller format stores and had created a separate division for 21 of its shops that are under 25,000 sq ft.
“Through a combination of new formats – both smaller supermarkets to meet the needs of local communities, and through Asda Living, we will broaden our business reaching more customers in markets that are currently under served by Asda,” Bond said. “I’m confident we have a model that we can now accelerate in this market.”
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By GlobalDataWal-Mart today posted a 7% increase in earnings from continuing operations for the 12 months ended 31 January, despite sluggish sales gains.
The company said that earnings increased to US$14.2bn, or $3.66 per share, up from $13.5bn, or $3.42 per share last year. EPS exceeded the company’s most recent guidance of $3.57 to $3.61 and beat consensus estimates.
