Growth Driven by Price Investments, Online Expansion, and Improved Product Quality

  • Asda reports increase in full-year sales and profits despite failed merger with Sainsbury’s
  • Operating profit increased by 9.2% to £803.2m, revenues up 3.1% to £22.92bn
  • Online sales grew ahead of the market in 2018 due to website and app improvements
  • Like-for-like sales decline by 0.3% in first half of 2019 compared to last year
  • Asda credited growth to targeted price investments, improved product quality, and availability
  • Lowering prices on key customer-favorite lines helped secure Asda’s G33 Price Award for the 21st consecutive year
  • CMA blocked Sainsbury’s-Asda merger due to potential price increases in stores and petrol stations
  • Walmart considers initial public offering for Asda with possible flotation in next 2-3 years

Asda has reported an increase in full-year sales and profits despite the failed merger with rival Sainsbury’s. The financial activities of all Asda stores, distribution centers, and online operations show operating profit increased by 9.2% to £803.2m and revenues up 3.1% to £22.92bn. Like-for-likes, excluding fuel and VAT, also increased 1.6% in the period to December 31, 2018, with net cashflow from operating activities at £1.29bn. Asda attributed growth to targeted price investments, further development of own-brand product quality and range, and improved availability, particularly in fresh products. The company also credited lowering prices on key customer-favorite lines to help mitigate the impact of food inflation, securing the G33 Price Award for the 21st consecutive year. Asda CFO Rob McWilliam said they remain steadfast in their approach to win on price, deliver a consistent customer experience, and drive growth where customers care. The Competition and Markets Authority (CMA) blocked the Sainsbury’s-Asda merger due to potential increased prices in stores and petrol stations. Asda’s US parent company Walmart is now considering an initial public offering with a possible flotation in the next 2-3 years.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Asda’s financial performance, including sales and profit increases, online sales growth, and strategies for maintaining competitiveness. It also mentions the blocked merger with Sainsbury’s and potential IPO plans by Walmart.
Noise Level: 3
Noise Justification: The article provides relevant information about Asda’s financial performance and its growth strategies. It also mentions the failed merger with Sainsbury’s and potential IPO plans by Walmart. The content is focused on the topic and supports claims with data (e.g., sales increase, profit growth). However, it could benefit from more in-depth analysis of the factors contributing to Asda’s success and challenges faced in the market.
Financial Relevance: Yes
Financial Markets Impacted: Asda’s financial performance and potential IPO impacting supermarket competition and Walmart’s strategy
Financial Rating Justification: The article discusses Asda’s financial results, the blocked Sainsbury’s merger, and Walmart’s consideration of an initial public offering for Asda, which affects the supermarket industry and its competitors.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk