Asda sales boosted by popularity of loyalty scheme
Asda has posted a strong uplift in full year sales and profit after it benefited from around six million customers using its rewards app.
In the year to 31 December, the supermarket’s adjusted EBITDA after rent increased by 24% to £1.078 billion as like-for-like sales grew by 5.4%.
Meanwhile, total sales, excluding fuel, rose by 7.1% to £21.9 billion in the year.
Mohsin Issa, Asda’s co-owner, said: “Asda is a supermarket powerhouse built on rock-solid foundations – as our strong annual results and the 18 million customers who shop with us every week demonstrate.
“Our strategy is all about growth and Asda increased underlying profit to more than £1 billion and like-for-like sales by over 5% last year, while significantly growing free cashflow and reducing leverage.
“We are committed to doing the right thing for customers, colleagues and local communities – and are putting in place the strategic building blocks to set up Asda for long-term success.”
Asda said the sales uplift was driven by the popularity of its rewards app which is now used by around six million customers and is linked to half of all sales. It also benefited from its ongoing investment in value for customers and price reductions applied to more than 800 popular everyday products.
The supermarket also invested in enhancing the quality of its food to build on the earlier launch of its Just Essentials value range. Work in 2023 included the introduction thousands of new and improved food lines, including a refresh of the supermarket’s ready meals range.
Its clothing range performed particularly well with sales growth of 3.4% to £1.5 billion as shoppers responded positively to its George brand.
During the year, Asda took full control of 116 convenience stores and three development sites from the Co-op. It also acquired 356 predominantly freehold sites of EG Group’s UK business as it looked to boost its growth in the convenience and food-to-go sectors. Asda said it is now on track to be operating 500 Express convenience stores by the end of this year as new ‘standalone’ sites open throughout the UK.
Earlier this year, Asda said it would be investing a record £150 million to make it the highest paying traditional supermarket.
Michael Gleeson, Asda’s chief financial officer, said: “After taking full ownership of Asda in June 2021, the priority of the shareholders was to invest in colleague pay and help customers during the most challenging period of the cost-of-living crisis.
“This included the successful launch of our budget-friendly Just Essentials range and resetting the supermarket’s opening price points, as well as later launching the Asda Rewards loyalty app.
“These investments resonated with customers and helped to drive significantly higher sales in 2023.”
