Asda back in sales growth after six-month struggle

Asda said its efforts to match other stores' prices and the revamp of its upmarket Extra Special food range had helped it back to sales growth in the third quarter.

Chief executive Andy Clarke, a former Asda store manager who took on the chain's top job in May, said its mid-tier Chosen By You range and George clothing label had also pulled in customers.

Clarke's strategy for growth, which has helped turn around six months of declining like-for-like sales, followed comments made in his first speech as boss that Asda had not focused enough on food quality.

Asda posted a 1.3% increase in like-for-like sales in the three months to September 30 and said profits for the third quarter had beaten its own targets.

The supermarket sector is proving increasingly competitive as shoppers resist higher prices caused by commodity costs inflation. Asda, the UK's second biggest supermarket chain, saw its market share edge lower to 17.2% in the three months to October 31.

But Clarke said Asda was keeping its prices low through its Asda Price Guarantee initiative, which allows customers to compare shopping bills to other supermarkets and receive a refund if they pay more elsewhere.

Clarke said: "We're acutely aware of our responsibility to do everything we can to keep lowering costs, and keep the cost of living down for all our customers."

Asda also revealed plans to create some 7,500 jobs next year, through store openings and its recent takeover of Danish supermarket Netto in the UK.