Asda, Britain’s third biggest supermarket group, reported a 24% rise in annual earnings on Monday that reflected a 7.1% rise in total sales
The supermarket now owned by the brothers Zuber and Mohsin Issa who began their business careers buying a single petrol station in Bury and the private equity firm TDR Capital reported profits of £1.08 billion on total sales, excluding fuel, of £21.9 billion .
The retailer said it had benefited from about six million customers now using its loyalty app to shop with around half of all sales are linked to its reward programme, Asda Rewards, which it described as a “key revenue driver” for the business.
Mohsin Issa, Asda’s Co-owner, said: “Asda is a supermarket powerhouse built on rock-solid foundations – as our strong annual results and the 18m customers who shop with us every week demonstrate. Our strategy is all about growth and Asda increased underlying profit to more than £1bn and like-for-like sales by over 5% last year, while significantly growing free cashflow and reducing leverage. We are committed to doing the right thing for customers, colleagues and local communities – and are putting in place the strategic building blocks to set up Asda for long-term success.
“As well as investing in price to maintain our position as the cheapest traditional supermarket, we continued to invest in further enhancing the quality of our products, building on the earlier successful launch of the budget-friendly Just Essentials brand with a significant own-label transformation programme. This saw us launch thousands of new and improved food lines to drive quality perception among consumers, including a refresh of our entire ready meals range.
“This investment includes non-food and saw George maintain its market leadership position in back-to-school wear and deliver total clothing sales growth of 3.4% last year* – *helped by our ongoing focus on price, quality and style.
“We continue to strengthen the business by expanding in the growing convenience and food-to-go sectors, leveraging our loyalty app and driving innovation in online grocery where we are the UK’s second largest supermarket.
“I would like to thank our colleagues for their hard work over the last year, serving millions of customers each week. Our recent investment in pay – a record £150m – will see Asda become the highest paying traditional supermarket in the UK and reflects how much we value the contribution of every colleague.”
