Asda Reports Decline In Q3 Revenue

• Q3 2024 total revenues, excl. fuel, declined 2.5% to £5.3bn, with LFL sales lower 4.8%
• Additional £13m investment to increase store hours during Q4 – the Golden Quarter 
• Record Back-to-School season drove 4.9% increase in George LFL sales – with George the top school wear brand for families
• Maintained position as best value traditional supermarket according to Which? Big Shop’ price comparison survey
• Over 400 new premium Exceptional lines rolled out including meat, fish, poultry and bakery – with initial sales up 98% year on year

Asda has today announced its results for the third quarter ending 30th September and updated on its plans and investment to improve the shopping experience for customers during the ‘Golden Quarter’.

The retailer reported a 2.5% decline in total revenues, excluding fuel to £5.3bn, with like-for-like sales declining 4.8% in Q3 2024, representing an improvement on the previous quarter this financial year.

Asda’s focus on key priorities outlined at the Q2 trading update – improving availability, enhancing the customer experience and investing in value – supported by an additional £30m investment in store hours, is already making a difference, with customer perceptions of availability improving noticeably both in stores and online in Q3.

To drive further improvements, Asda is investing a further £13m in store hours during Q4 to ensure more colleagues are on hand to support customers during the busy ‘Golden Quarter’ period.

Lord Rose, Asda’s Chairman, said: “We have undergone the largest transformation in our history during the last three years – doubling our store footprint, expanding into strategically important growth markets of convenience and food-to-go, and overhauling our digital capabilities. We have laid solid foundations to drive long term growth, but the unprecedented scale of these changes has absorbed a huge amount of the leadership’s time with a temporary impact on Asda’s customer experience in stores.

“As a key priority, we have been investing further and taking the right decisions to deliver an enhanced and more consistent in-store experience for our customers, as we set out in our Q2 results in August.

“Now it is time to deliver the best possible experience in our stores day-in-day out – and pull out all the stops for customers this Christmas and beyond. I would like to thank all our colleagues sincerely for their hard work and ongoing dedication.”

Delivering uncompromising value

Asda maintained its position as the best value traditional supermarket for families topping the ‘Which? Big Shop’ price comparison survey throughout Q3. Asda has led this monthly survey, which compares the cost of 165 branded and own-label lines across the major supermarkets, every month in 2024 except one.

A key focus of Asda’s value proposition is its hugely popular Rewards loyalty app, which now accounts for almost 57% of all transactions and has more than 6.8m regular users since launching in August 2022.

Asda continues to build loyalty and drive engagement by rolling out new and exclusive offers through the app, such as ‘Rewards Mega Weekend Deals’ which launched recently and helped to attract more than 300k new customers and increase weekly sales participation by 1.2%.

In addition, Asda continues to invest in its quality credentials and has doubled the size of its new premium Exceptional range which launched earlier this year. More than 400 new Exceptional lines have been rolled out recently across several categories including meat, fish, poultry and bakery. Initial sales of the range have been strong, up 98% year on year*, enhancing customers’ quality perceptions. 

Michael Gleeson, Asda’s Chief Financial Officer, said: “We are taking clear steps to improve store standards and deliver a more consistent experience for customers in whichever format they choose to shop with us. These plans are bearing fruit with customer perceptions improving, a continued market outperformance from our George fashion brand and a phenomenal response from customers to the quality and value of the new Exceptional premium lines. While our performance has begun to stabilise, we recognise that more work is required to deliver sustained sales growth.”

Best ever Back to School season

George, the UK’s market leader in kids wear and the third largest fashion retailer by sales volume, delivered a strong performance this quarter with a 4.9% increase in like-for-like sales in Q3.

A standout success was the ‘Back to School’ range, which generated approximately £180m in sales – its best performance to date. This accounted for 13% of the market, making George the top school wear brand for families. The ease and convenience of George’s digital offering also resonated with families, resulting in a 7.7% increase in George online sales during the quarter.  

To provide further value for families and support for local primary schools, Asda launched ‘Cashpot for Schools’ in September. The industry-first campaign donates 0.5% of the value of a customer’s shopping to a primary school of their choice each time they use the Rewards app. More than 97% of the UK’s primary schools have signed up with £4.3m donated to date.

Affordable indulgence this Christmas

With Christmas just over six weeks away, Asda launched its festive campaign and TV advert earlier this week. The ‘Gnome of Christmas’ features an animated team of gnomes who provide everything customers need for the festive season. The advert is already proving to be hugely popular, with more than 10m organic views on social media since launch.

This year’s festive food and drink range focuses on affordable indulgence and features 540 products, 243 of which are brand new. The range features several products that have won the coveted Good Housekeeping Christmas taste tests, including Crème Brulee and the Exceptional Fig, Whisky and Spiced Honey Smoked Salmon.  

Increased presence in growth markets

Following the conversion of 478 convenience stores acquired from the Co-op and EG UK, Asda is resuming its standalone Express stores rollout. Two new stores in Castleford and Finsbury Park open next month, with six more planned by year-end. These will expand Asda’s reach into residential and city centre locations.

Delivering Project Future

‘Project Future,’ Europe’s largest systems implementation programme, continues to progress at pace. This project involves separating over 2,500 systems from former owner Walmart and establishes the technological foundation for Asda’s future growth.

Asda has already migrated large parts of its operations to new platforms including finance, HR, CRM, depots, George.com, checkouts, and in-store picking systems. To prioritise serving customers during the Golden Quarter, conversions at larger stores will begin in January, while smaller sites, including PFS locations and Asda Express stores, will continue to convert during the rest of the year.

Reduction in net debt

The supermarket’s total net leverage as a multiple of pro forma EBITDA after rent remained stable in Q3 at 3.0x. Asda’s net debt at the end of Q3 quarter was £3.8bn – a £100m reduction on the previous quarter – and the business is committed to deleveraging.

*Versus Extra Special range in year prior

Source : Asda

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