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Walmart-owned Asda sees second-quarter sales bounce-back as recovery continues ahead of Sainsbury's takeover

Published: 08:39 16 Aug 2018 EDT

Asda store
Asda said that its second-quarter performance was boosted by new shoppers, stronger online sales and the launch of new products

Asda, the UK arm of US retail giant Walmart Inc (NYSE:WMT) saw its second-quarter sales show a solid bounce-back as the supermarket group’s recovery continued ahead of an expected takeover by rival J Sainsbury plc (LON:SBRY).

The UK’s fourth-biggest food retailer said its underlying sales excluding fuel rose by 0.4% in its second quarter, but removing the impact of an earlier Easter - which this year benefited the first quarter - sales were up 2.6%, after adjusted 1.0% growth in the first quarter.

READ: Asda CFO Alex Russo leaves for Wilko in wake of proposed Sainsbury's merger

Asda said that its second-quarter performance was boosted by new shoppers, stronger online sales and the launch of new products.

Back in April, Sainsbury’s agreed on the £7.3bn cash and shares takeover of Asda - a combination that will overtake Tesco PLC (LON:TSCO) as Britain’s biggest supermarket group if it is approved by competition authorities.

The strong performance backed up recent data from market researcher Kantar Worldpanel which saw Asda as the best performer in terms of sales growth of the big four supermarkets over the 12 weeks to July 15, the first time it had done so since December 2014.

Asda president and chief executive Roger Burnley said: “We remain focused on delivering our strategic priorities and investing in the areas that matter most to our customers - innovation in our own brand, lowering prices and in continuously improving our shopping experience both in store and online.”

WalMart ups 2018 sales expectations

The UK group’s parent, Walmart saw its second-quarter same-store sales leap by 4.5%, beating estimates of 4% and its strongest growth in 10 years, driven by a 40% jump in US e-commerce sales.

Walmart said it expected full-year US same-store sales growth to be 3%, compared with previous guidance for 2% growth and current consensus expectations for a 2.8% rise.

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