LONDON Asda, the British arm of U.S. retailer Wal-Mart Stores (WMT.N), continued to outperform many rival UK supermarkets even though it posted a slight slowdown in quarterly like-for-like sales growth on Thursday.
Britain's second-biggest supermarket chain behind Tesco (TSCO.L) said sales at shops open more than a year, excluding fuel and VAT sales tax, were up 0.3 percent in the 13 weeks to September 30, its fiscal third quarter.
The rise is below the 0.7 percent sales uplift Asda recorded in its second quarter.
"These are solid results in a tough market," said Asda's president and chief executive Andy Clarke, adding that money was still tight for customers.
Britain's retailers are mostly struggling as consumers' disposable incomes are squeezed by rising prices, subdued wages growth and government austerity measures. Grocers traditionally cope better in tough economic times thanks to their focus on essential goods but even they are suffering.
Last month Tesco reported a 12.4 percent fall in first half UK trading profit, while last week No.4 grocer Morrisons (MRW.L) posted a 2.1 percent fall in third-quarter underlying sales, highlighting high levels of promotional activity.
Sainsbury's has, however, been outperforming, posting a 5.4 percent rise in first-half profit on Wednesday.
The performance of Asda, which trades from over 500 UK stores, has been boosted by its focus on low prices and also reflects revamped fresh food lines and increased penetration of its own-brand food ranges.
The firm has also benefited from its price guarantee offering to refund customers the difference, via a voucher, if an online price comparison website does not show their shopping is at least 10 percent cheaper than at a rival.
Recent industry data has shown Asda increasing sales faster than its main rivals, apart from No. 3 grocer Sainsbury's (SBRY.L), over the past three months.
Separately on Thursday official data showed British retail sales posted a surprise fall in October as shoppers cut back on food and clothing purchases, reducing the chances consumers will boost the economy in the final quarter. (Reporting by Rhys Jones; editing by Sarah Young)