United Kingdom

Britain's Asda charters own cargo ship to protect Christmas supplies

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A worker pushes shopping trolleys at an Asda store in west London, Britain, April 28, 2018. REUTERS/Toby Melville

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LONDON, Nov 29 (Reuters) - British supermarket group Asda has chartered its own cargo ship to protect availability of key Christmas products, it said on Monday as it reported a drop in underlying sales in the third quarter.

Asda, owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital, said on Monday the ship, carrying 350 containers of festive products including decorations, toys, clothing and gifts, would arrive in the United Kingdom shortly.

British retailers are grappling with delays in international supply chains that are being compounded by labour shortages in domestic transport and warehousing networks, with a lack of heavy goods vehicle (HGV) drivers particularly acute.

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Asda said it had also increased the volume of turkeys and pigs in blankets in stores compared to last year, as well as building extra stock of festive products in depots such as mince pies, confectionary, Christmas cakes and puddings.

It has also recruited 15,000 temporary workers for the Christmas period and increased the capacity of its grocery home delivery service to one million slots in the final week before Christmas.

Supermarkets also face tough comparisons against record sales during COVID-19 restrictions last year that meant more meals were consumed at home.

Asda said like-for-like sales, excluding fuel, fell 0.7% year-on-year in the three months to Sept. 30, its fiscal third quarter, having fallen by the same amount in its second quarter. read more

Like-for-like sales were up 2.0% on the same period in 2019, before the pandemic impacted trading.

Asda, which has a UK market share of 14.3%, lagging industry leader Tesco (TSCO.L) and Sainsbury's (SBRY.L), said total third-quarter revenue, excluding fuel, was 4.93 billion pounds ($6.56 billion).

It said demand for online groceries softened during the quarter, with sales down by 2.7% on the same period last year as more customers returned to stores. Online grocery sales were up 80% on a two-year basis.

Asda has been without a CEO since Roger Burnley abruptly left the group in August. read more

However, last week it named Stuart Rose, the former boss of Marks & Spencer (MKS.L), as its new chairman. read more

($1 = 0.7514 pounds)

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Reporting by James Davey; Editing by Jan Harvey and Emelia Sithole-Matarise

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