Asda continues non-food expansion despite sales dip

Supermarket chain reports 0.3% like-for-like sales drop for the first quarter, and expects conditions to remain tough, but continues plans to “broaden its appeal”.

Asda continues non-food expansion despite sales dip

While comparative sales, excluding fuel and VAT, were down 0.3% for Q1 ended March 31, and total sales saw low single digit growth, profits for the same period grew ahead of sales, beating internal budgets.

At an analyst meeting last month Asda unveiled its five-year strategy, which set out two clear aspirations – to become the market leader in general merchandise and clear number two for food.

Despite the drop in sales, Asda explained it is making good progress in its bid to become a “broader non-food retailer”.

Chairman of the Asda executive committee Andy Bond said; “By our own high standards, or first quarter sales were disappointing. The market has slowed down significantly since the turn of the year, and I expect conditions to remain tough for some time.”

He added: “I’m pleased to say that we’re making good progress against the plans we outlined to analysts last month. Our four-pronged strategy to build sales and broaden our appeal is beginning to take shape.”

Last week Sainsbury’s reported that its non-food offer is growing at three times the rate of food, with a pre-tax operating profit of £19m for the year to March 20, 2010.

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