Asda Q2 sales drop, George scores in schoolwear

Asda, Britain’s third-largest supermarket group, reported a 5.3 per cent decline in underlying sales for the three months ending in June, continuing to lag behind its competitors.

The group, majority-owned by Mohsin Issa and private equity firm TDR Capital, announced that total revenues excluding fuel fell by 2.2 per cent to £5.3 billion.

Despite the overall decline, Asda saw an 88 per cent increase in Back-to-school sales in the two weeks leading up to mid-June, driven by its first-ever ‘early bird’ promotion offering 20 per cent off George schoolwear. The company also made significant investments in staff training focused on product choice and sizing.

However, for the quarter overall, George clothing sales dropped 3.9 per cent like-for-like as the brand concentrated on full-price sales outside of schoolwear. On the positive side, George’s online revenue increased by 3.9 per cent.

Asda also reported on Thursday that its net debt stood at £3.9 billion at the end of June, with a continued commitment to further reduce its debt.

Looking ahead, Asda plans to invest in core grocery lines, improve efficiencies, increase staff hours to ensure faster shelf restocking, and expand its customer loyalty program to drive a return to growth.