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Asda focuses on loyalty, convenience and the in-store experience as the cost-of-living crisis takes its toll

Image courtesy of Asda

Asda says it’s focusing on loyalty, convenience and the in-store experience, while promising to keep prices low during the cost of living crisis. The supermarket, ranked Elite in RXUK Top500 research, has seen like-for-like sales fall by more than 9% in the first quarter of its financial year.

The update comes as Asda reports sales of £4.6bn, excluding fuel, in the three months to March 31 2022. Sales were 9.2% down on the same time last year on a comparison that strips out the effect of store openings and closures.

A year earlier, the UK was in the third national lockdown, which meant that shoppers ate most of their meals at home and spent more with supermarkets, where they also tended to do more of their in-person shopping.

Food sales fell by 7% LFL in the first quarter, while spending on clothing (-19.3%) and general merchandise (-23.7%) fell more sharply.

Disposable income falls

The fall comes as the latest Asda Income Tracker showed disposable household income suffered the largest fall since the index launched in 2008. The income tracker measures how much discretionary income remains for households after they have paid taxes and bought essential goods from groceries to energy. It found that income now stands at average of £205, following a £161.52 fall in April, and was most significantly squeezed for the under 30s and over 75s. The fall comes as electricity prices rose by 54% and gas by 95% following the removal of Ofgem’s price gap.

Asda says it has responded to the rising cost of living by spending £90m on launching and expanding its Just Essentials range, and on locking in prices of more than 100 products until the end of the year. It has also raised the pay of its hourly paid shop workers to £10.10 an hour from July, from £9.66 previously.

Asda co-owner Mohsin Issa says: “The latest Asda Income Tracker highlights the stark reality facing millions of families in the UK right now with household incomes more squeezed than ever. Asda has a strong heritage of investing in price and customers can trust us to be on their side when they need it the most. We are investing in helping our shoppers manage the challenges of the here and now, as well as progressing critical strategic initiatives including loyalty, convenience and enhancing our in-store offering, which will all deliver long-term value.”

Asda also said that its Asda Rewards loyalty programme was now live in 48 stores and that it had opened 35 Asda on the Move stores.

Ken Towle, formerly of Tesco and convenience chain Nisa – where he was chief executive – has joined Asda this week as retail director, in charge of the supermarket’s 640 stores. Michael Gleeson will be joining the supermarket next year as chief financial office, while Kris Comerford will join in the next few weeks as chief commercial officer for food.

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