Asda profit soars to £693m as sales top £20bn

Leeds-based supermarket giant Asda announced that its 2021 total sales increased 0.5% to £20.4 billion “driven by a strong performance in home and outdoor and a return to growth in clothing after pandemic-related disruption in 2020.”

Asda said its 2021 operating profit increased 42% to £693.1 million “predominantly due to a reduction in Covid-related costs compared with the previous year.”

Blackburn-based billionaire brothers Mohsin and Zuber Issa and private equity firm TDR Capital completed the £6.8 billion acquisition of a majority ownership stake in Asda from Walmart Inc. in 2021.

Walmart retains an equity investment in Asda, with an ongoing commercial relationship and a seat on the board.

Asda is currently the UK’s third largest grocer with a market share of 14.6%, behind Tesco on 27.7% and Sainsbury’s on 15.5%, according to Kantar data.

The 2021 results came as Asda confirmed it will launch a large budget-friendly “essentials” range in the market to help families fight rising living costs.

“Just Essentials by Asda” comprises 300 products, 50% more than the Smart Price Range it will eventually replace. Products will arrive in stores from May onwards and will be rolled out across the summer.

“The new range will span all key categories including fresh meat, fish and poultry, bakery, frozen and all cupboard staples, so that families can create their favourite meals, whatever their budget,” said Asda.

“It will also include more than 20 essential household and toiletry products including washing-up liquid, toilet roll, laundry powder, shampoo and conditioner.

“Asda will stock the full range in all 581 food stores, as well as online, and will continue to sell Smart Price products until these are replaced by Just Essentials.”

Mohsin Issa said: “We understand that customers are increasingly worried about the cost of living and want help to keep their grocery bills in check, whilst still being able to buy healthy and nutritious food for their families.

“Our new ‘Just Essentials’ range has been specifically designed with this in mind, combing our lowest prices with a much larger and more diverse range of great value products to meet all household needs …

“When we bought Asda we were clear that we wanted to grow this great business and our ambition is for Asda to regain its position as the UK’s second largest grocery retailer.

“We are pleased with the progress made in the six months since we officially took over the business and are confident we can achieve this long-term ambition by providing customers with exceptional value wherever and however they choose to shop with us.”

Asda said its 2021 fourth quarter performance was set against strong comparatives in the same period of 2020, which coincided with the UK’s second national lockdown in November and saw significant Covid-related restrictions in place during the Christmas period.

As a result, Q4 like-for-like sales were 2.9% down compared with the same quarter of 2020, but remain 2.6% up on a two-year basis.