Asda sales up ahead of Sainsbury’s merger

Walmart’s Leeds-based subsidiary Asda — currently preparing to be taken over by Sainsbury’s — on Thursday reported a sixth straight quarter of underlying sales growth.

For the quarter to September 30, Asda posted a 2% increase in like-for-like sales.

On Tuesday, Kantar Worldpanel data showed Asda accounts for 12.7% of the total UK grocery market.

In April, Asda agreed to a £7.3 billion cash and shares takeover by Sainsbury’s — a combination that could overtake Tesco as the UK’s biggest supermarket group if it is approved by the UK’s competition regulator.

The merger is currently being examined by the UK’s Competition and Markets Authority (CMA).

The deal would see Walmart receive about £3 billion, take a 42% stake in the combined business, and have options to sell down to 29.9% after two years and exit completely after four.

Walmart CEO Doug McMillon said: “In the U.K., comps of 2.0 percent marked the sixth consecutive quarter of growth, and online grocery sales outpaced the market, according to Kantar.

“Additionally, we received follow-up communication from the competition authorities related to the proposed merger of Asda and Sainsbury’s.

“This latest statement was in-line with our expectations, and we will continue to proactively work through the process with the CMA.”

Asda CEO Roger Burnley said: “In a challenging third quarter for the market we continued to focus on the areas that we know are important to our customers and deliver on our strategic priorities.

“As a result we were pleased to welcome an additional 115,000 customers through our doors and outperform the market for the second quarter running.

“During the quarter we continued to grow our distinct Own Brand offer, including the expansion of our Free From range to include 113 new lines, as well as expand scan and go to 192 stores.

“We were delighted to work with Denbies in Surrey to launch our first English Sparkling Wine and we also opened our first two food re-distribution centres in the East Midlands and Leeds as part of our ground-breaking Fight Hunger Create Change programme with FareShare and the Trussell Trust.”