Asda underlying profits swelled by a quarter last year, fueled by increased food and clothing sales.
The retailer reported an adjusted EBITDA of £1.078bn for 2023, with total sales, excluding fuel, jumping 7% to £21.9bn. Like-for-like sales rose 5.4%.
Around half of all sales are linked to its reward programme, Asda Rewards, which it described as a “key revenue driver” for the business, with around six million customers using the app.
The grocer said that customers were responding well to its ongoing investment in value last year amid the cost-of-living crisis, as it slashed prices on over 800 popular everyday products in 2023.
Its adjusted EBITDA included £27m from two months trading of the former EG UK stores it acquired and £54m from ex-Co-op stores, “demonstrating the strategic value of acquiring these businesses in the growing convenience and food-to-go sectors”.
The supermarket’s clothing sales grew by 3.4% to £1.5bn, as shoppers “responded positively to its ongoing focus on the style, quality and price credentials of its George brand“.
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Asda co-owner Mohsin Issa said: “We are committed to doing the right thing for customers, colleagues and local communities – and are putting in place the strategic building blocks to set up Asda for long-term success.
“We continue to strengthen the business by expanding in the growing convenience and food-to-go sectors, leveraging our loyalty app and driving innovation in online grocery where we are the UK’s second largest supermarket.”
The results comes as one of the Issa brothers who backed Asda’s buy-out is about to sell his stake to private equity group TDR Capital.
Zuber Issa is said to be close to offloading his 22.5% stake, worth £500m, which would give TDR majority control of Britain’s third-biggest supermarket.
The co-owner began talks about selling his stake in Asda in February, and earlier this month, it was reported he was planning to step back as co-chief executive of EG Group.
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