Asda saw its online grocery sales double in the second quarter, as the coronavirus outbreak led to a “structural shift” to online shopping.
Announcing its Q2 results today, parent company Walmart said Asda’s sales grew 3.8% year on year excluding fuel, between 1 April and 30 June.
However, the highlight was record online grocery sales with its online capacity growing by 65% since March, to 700,000 weekly slots and a quadrupling of click and collect sales.
Asda said it planned to increase online capacity to 740,000 slots per week by the end of the year – and had set its sights on increasing capacity further to up to one million slots in 2021.
As part of the drive to online deliveries Asda also revealed it was expanding its delivery partnership trial with Uber Eats to 25 more stores over the next eight weeks and was reinstating its same day and express click and collect service at more than 300 stores.
The service was paused at the height of the pandemic to reduce pressure on stores.
The results come with Walmart having restarted talks with a number of third-party investors as it looks to sell the supermarket giant, with Covid also having temporarily put the process on hold.
“The pandemic has created a structural shift in customer behaviours towards grocery shopping,” said Asda CEO and president Roger Burnley.
“We have accelerated our online capacity expansion to meet levels we had anticipated reaching in eight years within a matter of weeks and we will continue to expand this offer.
“We will also maintain focus on ensuring our in-store experience delivers what customers want from a shopping trip – great value, relevant range and ease.”
He added “As life under Covid 19 continues, customer concerns are shifting from the health consequences of the pandemic to its financial impacts – and we remain absolutely committed to protecting both their health, and their budgets.”
Walmart’s second quarter results presentation showed that Asda’s net sales fell 5.3% in the quarter due to a sharp reduction in demand for fuel.
The number of Asda customer transactions fell by 40.3%, but the average value of each shop was up by 73.8%.
Asda’s operating income fell in the quarter driven by a shift in mix to lower margin categories and incremental costs related to COVID-19.
Walmart itself posted a 5.6% rise in total revenues to US$137.7bn in the quarter, helped by a 9.3% rise in the group’s comparable US sales.
Group consolidated operating income rose 8.5% to US$6.1bn, helped by a shift in the mix of sales to higher-margin general merchandise categories, fewer markdowns and better margins on fuel.
Shore Capital analyst Clive Black commented: ”Wal-Mart has performed well in Q2 2021, most notably in the USA, where we sense particularly pleasing progress online.
“Closer to home, Asda has also delivered good underlying sales growth in Q2 albeit as with the rest of the UK supermarkets, the costs of compliance have been high - squishing talk of windfall taxes.”
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