January 6, 2014 / 8:20 AM / 4 years ago

Asda says 'no gimmicks' Christmas strategy pays off

LONDON, Jan 6 (Reuters) - Asda, the British arm of U.S. grocer Wal-Mart Stores, said it enjoyed a good performance at Christmas both in store and online.

The supermarket, battling with J Sainsbury to be Britain’s second largest grocer, is not scheduled to release its trading figures for its fourth quarter until Feb. 20.

However, it said on Monday it was confident its strategy for Christmas was the right one.

“Our strategy was to focus on gimmick-free, simple every day low price transparency for our customers and to hold our nerve when it came to the sales,” it said.

“This was against the backdrop of many other retailers vouchering heavily and starting their sales early, and resulted in us seeing record footfall over the Christmas period.”

Britain’s big grocers traditionally cope better in tough times thanks to their focus on essential goods. But with consumers’ disposable incomes still being squeezed by wage rises not keeping up with inflation they are finding growth hard to achieve.

Market leader Tesco will update on the six weeks to Jan. 4 on Thursday, while Sainsbury will report third-quarter sales on Wednesday.

Tesco is forecast to report a fall in UK sales at stores open over a year, excluding fuel and VAT sales tax, of 0.5-2.5 percent, while Sainsbury’s is expected to post like-for-like sales in a range of flat to down 1 percent.

Asda said on Dec. 23 a record 4.8 million customers passed through its 573 UK stores, and it also had its biggest ever online Christmas, with grocery home shopping sales on Dec. 21 and Dec. 22 exceeding 5 million pounds ($8.2 million) for the first and second time.

The firm also noted that 28 percent of grocery home shopping sales were ordered through its smartphone app in December, while mobile app sales were up over 200 percent on last year.

Asda said in November that over the next five years it would invest 1 billion pounds in prices and 250 million pounds in improving product quality, seeking to expand its 17 percent share of the UK grocery market and counter the growing threat of discounters Aldi and Lidl

Asda’s third quarter like-for-like sales rose 0.3 pct.

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