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Asda releases Q1 results and reinforces its focus on customers

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Walmart has published its earnings returns for the first quarter of 2019 including financial results for its UK business, Asda, for the period 1st January 2019 to 31st March 2019.

With an adjustment for the later Easter versus 2018, the UK supermarket delivered a 0.5% like-for-like sales growth excluding petrol over the first quarter of 2019. Without the Easter adjustment Walmart reported a sales decline of 1.1%.

During the Walmart earnings call, Walmart CEO and President Doug McMillon said: “In the UK, we are disappointed that the proposed merger of Asda with Sainsbury’s isn’t happening because it would’ve been good for customers and the businesses. Asda continues to focus on delivering against our strategy and has built momentum in the business, which is impressive.”

Commenting on Asda, Walmart Chief Financial Officer Brett Biggs added: 
Moving to International, while seven of 10 markets had positive comps in the quarter, we’re managing through political and economic headwinds in several of our International markets, which contributed to a bit weaker results this quarter than we’ve had recently. In addition, as Doug mentioned, we were disappointed in the CMA’s decision in the UK. We’re focused on continuing to execute the strategy to strengthen Asda’s long-term success, including the potential of an IPO at some point in the future. We’ll be thoughtful and measured in our approach. We remain focused and confident in our International strategy of building strong local businesses powered by Walmart. 

“…The Easter calendar shift negatively affected several of our markets, including Asda where comps declined 1.1 percent, but would have been positive without the Easter flip. 

“Against a challenging backdrop in the UK, Asda comp sales declined with the Easter flip, but transactions were positive as customer experience continued to improve. The Asda team is making progress on key strategic priorities. For example, price competitiveness improved this quarter and private brand penetration grew. In addition, online grocery sales were strong with a 10 percent increase. It’s a competitive market, but Asda is making steady progress in its positioning.”

Commenting on Asda’s performance in the quarter, Asda CEO and President, Roger Burnley, said: “Throughout the quarter we have maintained our focus and momentum, against an increasingly challenging backdrop and we remain entirely focussed on delivering our strategy, without the benefits the proposed merger with Sainsbury’s would have delivered. Our strategy remains as it always has been – winning on price for customers, whilst delivering a consistent customer experience and investing in driving growth where customers care. Throughout the quarter we have continued to grow our online food and George businesses, as well as remove 6500 tonnes of plastic from our operations. We continue to consult with our colleagues on proposals to increase their base rate of pay, whilst ensuring we have the right people in the right place at the right time for customers. 

“But what has got us here, won’t get us where we need to go – with the rate of change accelerating, we have a tough job to do and need to go even faster, and be even more innovative in the solutions we deliver for our customers. We cannot be complacent, but I believe that we have the right plan and some amazing colleagues to deliver in this highly competitive market – and I’d like to thank them all for all their hard work.”

Q1 highlights:

  • Asda achieved double digit growth on Asda.com and George.com
  • Price investment continued across own brand ranges, helping to drive own brand sales that outpaced the market, along with thousands of Rollbacks on customers’ branded favourites
  • Asda announced it removed 6500 tonnes of plastic from its own brand packaging in the 12 months since February 2018 as part of an ongoing commitment to reducing the amount of plastic used in product packaging

The results come in the week Asda Chief Executive Officer Roger Burnley, along with his leadership team, gathered 1200 senior managers in Leeds to galvanise focus for delivering on the long-term strategy and driving sustained momentum within a changeable market. During the event, Asda’s managers were rallied by Roger Burnley to “prioritise what will make a difference to customers” and to seek opportunities to innovate for customers every day. For key highlights from the Mid-Year Meeting 

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