Asda, Britain's third largest supermarket group, recently said that its underlying sales rose 2.8% year-on-year in its third quarter - a sharp slowdown from growth of 9.6% in the previous quarter and an underperformance versus its bigger rivals.
The grocer, owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital, reported revenue of £5.4 billion for the three months to the end of September.
Sales Increase
It said like-for-like food sales increased 3.2% but clothing and general merchandise sales fell 3.4% as, like other retailers, Asda was impacted by unseasonable weather across this period.
Last week, No. 2 player Sainsbury's noted that its second quarter to 16 September underlying sales rose 6.6%, while in October market leader Tesco reported an 8.4% rise in second quarter UK like-for-like sales.
Monthly industry data this year has also consistently shown Asda underperform rivals.
Repaid Loan
Asda also said it had repaid a £200 million loan facility used to acquire the Co-op’s 42 convenience stores and forecourts business last year.
“Asda has a sustainable capital structure, strong cash generation and clear strategy to deleverage over time, as the early repayment of the loan facility used to acquire the Co-op business demonstrates," finance chief Michael Gleeson said.
Last month, Asda completed the acquisition of the majority of petrol forecourt operator and retailer EG Group’s UK & Ireland business for an enterprise value of 2.07 billion pounds.
Asda's strategy is to boost its convenience store presence by rolling out Asda Express stores across EG's 356 UK sites.
EG is also owned by the Issa brothers and TDR.
Read More: UK Supermarket Asda Completes $2.5bn Purchase Of EG's UK Business
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