At the release of its Q1 results, Asda has provided new detail about its future plans in the wake of now abandoned plans to merge with Sainsbury's.
Easter impact to trading
In the quarter ending March 31st reported a 1.1% decline in sales, impacted by the late timing of Easter. Adjusted for this calendar impact, like-for-like sales would have risen 0.5%, reflecting both a positive volume response to investments in price and a pick up in customer transactions. Previously Asda had grown LFL sales for seven previous consecutive quarters.
IPO possible following Sainsbury's merger outcome
Commenting on Asda's future strategy, Walmart's CFO Brett Biggs said: "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. " His words echo comments earlier this week from Walmart International CEO, Judith McKenna. In an address to colleagues she said: "While we are not rushing into anything, I want you to know that we are seriously considering a path to an IPO – a public listing – to strengthen your long term success."
Investing in price
Asda highlighted how improvements to its price positioning positively impacting trading in Q1, with 'thousands of Rollbacks' on popular brands and continuing investment inn own brand ranges. Earlier this week CEO Roger Burnley said Asda would accelerate its position on price, revealing plans to invest £80m in price through the rest of 2019.
Technology to enhance the customer experience
Asda will also accelerate its focus on 'hassle-free shopping" including a test on same day delivery of groceries. Linked to this, it plans to roll out mobile Scan and Go to more stores following its launch at 25 stores last week. It will also introduce parcel collection towers to more stores following their success at the Trafford Centre and Patchway (Bristol). The retailer also confirmed that it will develop Stevenage as its 'tech store' where a range of new solutions will be implemented to see "the benefits of a number of different technology working together". In Q1, online grocery sales grew by 10% and George.com also delivered double digit growth.
Action on plastics
Asda is stepping up actions to cut back on plastic packaging. In the 12 months to February 2019, it removed 6,500 tonnes of plastic from its own brand products, part of a continuing commitment to reduce plastic packaging.
See also: Lawlor promoted in Asda management shakeup
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