UK supermarket Asda has updated investors on its Q3 trading performance over the three months to the end of September 2023, reporting revenues of £5.4 billion and a 2.8% increase in like-for-like sales, compared to the same period of the previous year.

Asda’s like-for-like food sales increased by 3.2% during Q3, compared to a year earlier, underpinned by the “strong performance” of its Just Essentials value range, with sales up by 21% year-on-year, in its second year since launch.

Asda said that it ran two separate price drop campaigns during the quarter, lowering the prices on over 600 products by an average of 10%, taking the total amount Asda has invested in lowering prices for customers this year to £130 million. It said that this was to “ease the financial pressures facing families”.

Through its Asda Rewards loyalty app, customers redeemed £73 million in rewards, increasing the total amount that customers have earned in their Cashpots since Rewards launched last year to almost £300 million.

Mohsin Issa, Asda’s co-owner, said: “Despite inflation easing slightly, we know that many families are still struggling, as disposable income for the average household is 10% down compared to two years ago.

“Throughout the quarter we have been focused on helping customers save money whenever they shop with us, and this remains our key focus. This means keeping prices low on the products they buy the most, putting money back in their pockets via the Asda Rewards app and passing on savings whenever there is an opportunity to do so.”

Co-op store acquisitions

Asda also confirmed to investors that it had repaid a £200 million loan facility used to acquire the Co-op’s convenience stores and forecourts business last year. It said that the repayment was made possible by Asda’s strong cash generation in the year to date, which reduces the retailer’s total debt leverage to 3.8x.

Michael Gleeson, Asda’s chief financial officer, said: “Asda has a sustainable capital structure, strong cash generation and clear strategy to deleverage over time, as the early repayment of the loan facility used to acquire the Co-op business demonstrates.”

Following the recent acquisition of EG Group’s UK convenience business, and the 119 stores acquired from the Co-op last year, the programme to convert the acquired stored to Asda Express is “well underway”.

The 100th Asda Express store is set to open in mid November, with Asda expecting to complete the conversion programme in the first half of next year.

FareShare partnership

With Christmas approaching, Asda announced that it has expanded its partnership with FareShare and will donate the equivalent of one million meals during the festive season.

Mohsin Issa said: “Whether it’s through our continued focus on offering the best prices to our customers or campaigns like £1 café meals for kids and over 65s – we’re committed to supporting families through the cost-of-living crisis.

“We’re incredibly proud to build on our longstanding relationship with FareShare and work across Asda and IPL to identify surplus food within our supply chain to provide a million additional meals in the run up to Christmas.”

Making Christmas affordable

Asda launched 275 new festive lines, including the Extra Special Norfolk Bronze turkey crown with pork, sage and caramelised onion and the Extra Special Jewelled Topped Christmas Pudding.

The supermarket said it was focused on “making Christmas affordable for all customers” and has launched a frozen Christmas dinner for six that costs £25, working out at £4.17 per head and all the products featured are cheaper than last year by an average of 8%.