Christmas comes early for Britain's Asda during pandemic

James Davey
·2-min read
FILE PHOTO: A general view shows the UK supermarket Asda, as the store launches a new sustainability strategy, in Leeds
FILE PHOTO: A general view shows the UK supermarket Asda, as the store launches a new sustainability strategy, in Leeds

By James Davey

LONDON (Reuters) - Against the backdrop of the COVID-19 pandemic British shoppers are preparing for Christmas earlier than ever before, supermarket group Asda said on Tuesday.

Asda, Britain's third largest grocer after Tesco <TSCO.L> and Sainsbury's <SBRY.L>, said it had already seen a surge in demand for Christmas products and "lockdown proof" festive goods.

"We have already seen a marked shift in buying patterns with customers stocking up their freezers and cupboards with festive essentials earlier than ever before," said CEO Roger Burnley.

He highlighted sales of Christmas puddings up 71% year-on-year, and mince pies up 44%. Sales of Christmas trees were up 83% and festive lights by 57%.

Asda said there was also evidence customers were preparing for smaller Christmas gatherings, given current government restrictions on meeting friends and family. Sales of frozen turkey crowns, which typically serve three to four people, had increased by 230%.

Asda is currently owned by U.S. giant Walmart <WMT.N>.

However, last month the Issa brothers and private equity group TDR Capital agreed to buy a majority holding in Asda in a deal giving it an enterprise value of $8.8 billion.

The deal, under which Walmart will keep a minority stake, requires regulatory approvals and is expected to close in the first half of 2021.

Asda said like-for-like sales, excluding fuel, rose 2.7% in the third quarter to Sept. 30 - a slowdown from growth of 3.8% in the previous quarter.

Industry data has shown Asda's growth to be lagging that of Tesco, Sainsbury's and Morrisons <MRW.L>, partly reflecting Asda's lack of a local convenience store offer - a format that has proved popular with consumers during the crisis.

Asda is, however, performing well online, with sales soaring 72% in the quarter.

It expects rapid growth in online shopping to continue in the Christmas quarter and has increased the capacity of its grocery home shopping service to 765,000 weekly slots.

Asda has also extended its delivery trial with Uber Eats from 50 to 100 stores.

Separately on Tuesday Walmart posted a bigger-than-expected increase in quarterly same-store sales.

(Reporting by James Davey; editing by Michael Holden/Stephen Addison/Jane Merriman)