Own-brand goods help Asda grow revenue by 9.6 per cent

Bosses at the retailer said that Asda was still experiencing increases in its costs, but that it would pass through savings to customers “wherever we can”.

Sales of the company’s own-brand products jumped by 14.7 per cent during the period, Asda said.

Just Essentials, its lowest-price product line which was launched last year, has captured a fifth of the market in that time. It replaced Asda’s Smart Price range when it launched in May 2022.

Finance boss Michael Gleeson said the growth in Asda’s sales showed the strength of what it could offer to customers.

“While we continue to see inflation headwinds in our cost base, wherever we are seeing reductions in commodity prices – such as wheat and milk – we are doing the right thing to pass those savings to our customers wherever we can, particularly in our own brand ranges,” he said.

Mr Gleeson added: “Our focus on providing great quality and affordable food, stylish clothing and homewares from George, and the ability to shop when and how they like, is clearly resonating with our customers.”

Asda said it had delivered an average of around 800,000 orders per week from its online supermarket, making it the second-largest online operator in the UK.

The company’s clothing business grew like-for-like sales by 2.8 per cent, and the general merchandise business, which includes homeware products, grew by 6.3 per cent.

Asda co-owner Mohsin Issa said: “We know that thousands of families continue to struggle with the cost of living, and we’re committed to doing all we can to support them.

“This quarter, we have locked the price of over 500 everyday items to help families keep a handle on their budgets, as well as reducing the price of over 200 own-label items by an average of 9 per cent – including fresh fruit, vegetables, cupboard staples and ready meals.”

He added: “We have also extended our hugely popular kids eat for £1 cafes offer until the end of the year. I am incredibly proud that we have been able to serve over two million meals to kids since we launched the initiative last June, investing £1.3m to date to keep the prices pegged at £1.”

Earlier this week, it was revealed that grocery price inflation had slowed down at the second fastest rate since records began over the past month.

Analysts at Kantar reported price inflation across grocery shops at 12.7 per cent for the four weeks to August 6, dropping from 14.9 per cent over the previous month.

It is the fifth consecutive decline in the rate of price rises since the figure peaked at 17.5 per cent in March.

The latest drop comes as supermarkets have pulled down the price of some staples, such as milk, since earlier in the year.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “The latest slowdown in price rises is the second sharpest monthly fall since we started monitoring grocery inflation in this way back in 2008.”