Asda sales increase as supermarket targets Aldi and Lidl shoppers

Asda has revealed a rise in sales over the first three months of the year amid efforts to win more customers from discount rivals Aldi and Lidl.

The UK’s third largest supermarket firm said growth was driven by the rapid expansion of its convenience store business and strong sales for its George fashion arm.

Total revenues, excluding fuel, increased by 6.6% to £5.3 billion for the quarter to the end of March, compared with the same period a year earlier.

Like-for-like sales were up 1.4%, although this reflected a slowdown in growth against the previous quarter.

Asda, which was bought by the billionaire Issa brothers and private equity backers TDR Capital in 2021, said it also improved profit margins.

The sales growth came after the retailer said it would match Aldi and Lidl prices on a raft of popular products at the start of the year.

The firm has seen its share of the UK grocery market come under pressure in recent years amid a surge in popularity for the German discount brands, with Lidl reporting particularly strong growth recently.

Michael Gleeson, chief finance officer of Asda, said the group has been “doing a better job” on pricing, with investments in prices over the past year.

Asda also hailed a strong performance for its George clothing operation, with revenues growing 3% to £293 million for the quarter.

The business was supported by it growing convenience store operation, and completed its conversion of roughly 470 Co-op and EG Group shops to its Asda Express brand.

The convenience store growth helped Asda increase its total store estate to more than 1,200 sites.

Mohsin Issa, co-owner of Asda, said: “Asda made good progress against its strategy in the quarter, laying the foundations for long-term success – including completing the conversion of our newly acquired sites to Asda Express, as part of our strategic expansion into the growth markets of convenience and food-to-go.

“We did this while continuing to deliver great range, value and convenience, including investing in lower prices and the quality of our food and non-food at a time when the household budgets of our customers remain under pressure.”