Asda has reported that its underlying sales rose by 1.4% in the first quarter, marking a slowdown from growth of 2.2% in the previous quarter.
The news, reported on Friday, indicated that Britain’s third-largest supermarket group was underperforming against its bigger rivals.
‘Laying The Foundations’
The retailer, owned by brothers Zuber and Mohsin Issa, along with private-equity group TDR Capital, noted that total revenue excluding fuel rose by 6.6%, to £5.3 billion, in the three months to 31 March.
Asda holds the third-largest market share in the UK, after market leader Tesco and number-two supermarket Sainsbury’s.
According to data from market research company Kantar, Asda’s sales fell by 0.4% over the 12 weeks to 14 April.
Its market share fell by 60 basis points, year on year, to 13.4%.
Despite this, Mohsin Issa said, “[Asda] made good progress against its strategy in the quarter, laying the foundations for long-term success.”
He mentioned the completion of the conversion of 470 convenience sites acquired from the Co-op and EG UK to Asda Express.
Issa noted that these conversions increased Asda’s total store estate to over 1,200 sites.
‘Right Things For The Long Term’
In January, Asda introduced price-matching discounters Aldi and Lidl, in an effort to gain back market share.
Chief financial officer Michael Gleeson told reporters, “We’re confident we’re doing the right things for the long term.”
Asda has been burdened with high debt levels since the Issas and TDR bought the business from Walmart in a £6.8 billion deal in 2020.
The deal left the US supermarket giant with a 10% stake in the business.
Asda’s interest costs in 2023 were £225 million.
Earlier this month, Asda refinanced over £3.2 billion of debt.
The supermarket has been without a chief executive since Roger Burnley left abruptly in 2021.
Gleeson said that the search for a replacement was ongoing.
He declined to comment on reports that suggested that Zuber Issa was looking to sell his 22.5% stake.
Read More: Asda UK Refinances Over £3.2bn Of Debt
