Asda sales rise on strong Christmas
Asda has reported rising sales in the final months of last year and said it had a strong Christmas trading period.
It reported a 0.5% increase in like-for-like sales – the most closely watched measure of sales, which strips out the effect of new stores.
It is the third quarter of sales growth for Asda, which had previously seen three years of falling sales.
Asda is owned by Walmart, which reported a 2.6% increase in like-for-like sales during its fourth quarter.
However, the US retail giant saw profits fell 42% to $2.2bn.
Asda credited its low prices and an improved customer experience for its rising sales.
Walmart chief executive Doug McMillon said he was encouraged by the performance, but said there was "more work to do" at Asda.
Bryan Roberts, retail analysts at tcc global, said the company "played a good game over Christmas".
"During visits, we've seen a marked improvement in service levels and sharper all-round availability," he said.
Family focus
In recent years, Asda has been a laggard among the big supermarket chains. It has also suffered from the growth of Aldi and Lidl, which compete fiercely on price.
Mr Roberts said these latest results hinted at a return to form.
"In its heyday, Asda really appealed to younger families. Its supermarkets were fun places to be, with layouts designed to delight young children in particular," he said.
"It's lost some of that spirit over the years, but its recent seasonal campaigns – such as at Christmas and Halloween – show it still has that capability in the locker.
"A focus on recapturing a year-round family appeal could catalyse its ongoing recovery."
Headwinds
The results from Asda's parent company, Walmart, disappointed some analysts.
Online sales grew 23% – a sharp slowdown on the previous quarter, when it recorded growth of 50%.
Also, the company's forecast for profits this year was below the level some investors were expecting.
Walmart has headwinds to contend with. In January, it promised to raise wages, while it is also striving to match Amazon's prices.
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