- New ‘Just Essentials by Asda’ value range launched to keep households running on a budget
- With 300 products ‘Just Essentials by Asda’ is the largest value range in the market
- Like-for-like sales in 2021 increased by 0.6% compared with previous year and by 4.3% on 2019
- Operating profit in 2021 grew by 42% to £693.1m, predominantly due to a reduction in Covid-related costs
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Asda has today confirmed it will launch the largest budget-friendly essentials range in the market to help millions of families fight rising living costs.
‘Just Essentials by Asda’ comprises of 300 products, 50% more than the Smart Price Range it will eventually replace, while still offering customers the same great value. Products will arrive in store from May onwards and will be rolled out across the summer.
The new range will span all key categories including fresh meat, fish and poultry, bakery, frozen and all cupboard staples, so that families can create their favourite meals, whatever their budget. It will also include more than 20 essential household and toiletry products including washing-up liquid, toilet roll, laundry powder, shampoo and conditioner.
Asda will stock the full range in all 581 food stores, as well as online, and will continue to sell Smart Price products until these are replaced by Just Essentials.
The launch of Just Essentials, plus the thousands of ‘rollback’ price reductions available in store and online every week, further strengthen Asda’s position as the lowest-priced Big Four supermarket – a position that continues to be recognised by the Grocer 33 and Which? independent price comparison surveys.
Mohsin Issa, Asda’s co-owner, said: “We understand that customers are increasingly worried about the cost of living and want help to keep their grocery bills in check, whilst still being able to buy healthy and nutritious food for their families. Our new ‘Just Essentials’ range has been specifically designed with this in mind, combing our lowest prices with a much larger and more diverse range of great value products to meet all household needs.”
He added: “When we bought Asda we were clear that we wanted to grow this great business and our ambition is for Asda to regain its position as the UK’s second largest grocery retailer. We are pleased with the progress made in the six months since we officially took over the business and are confident we can achieve this long-term ambition by providing customers with exceptional value wherever and however they choose to shop with us.”
These new initiatives were confirmed to investors today in a trading update covering Q4 and the financial year ending 31st December 2021. This covered the activities of Asda Group Limited which includes all Asda stores, online operations, clothing, general merchandise and fuel.
The supermarket’s Q4 performance was set against strong comparatives in the same period of 2020, which coincided with the UK’s second national lockdown in November and saw significant Covid-related restrictions in place during the Christmas period. As a result, like-for-like sales were 2.9% down compared with the same quarter of 2020, but remain 2.6% up on a two-year basis.
The performance of Asda’s Extra Special range was the highlight of Christmas trading as customers splashed out on premium products to celebrate a lockdown-free festive period. Extra Special sales in Q4 were 28% up on the previous year, making it the fastest growing premium supermarket own-label brand.
During 2021 total sales increased by 0.5% to £20.4bn (2020: £20.3bn) and by 0.6% on a like-for-like basis. The rise in sales was driven by a strong performance in home and outdoor and a return to growth in clothing after pandemic-related disruption in 2020.
Grocery like-for-like sales decreased by 0.5% in 2021 compared with 2020, when the UK spent most of the year under Covid-related restrictions, resulting in more meals being consumed at home. However, like-for-like grocery sales remained strong on a two-year basis, with growth of 4.6%.
In the online channel, sales decreased by 5% in 2021, as lockdown-restrictions eased, however, demand remains significantly above pre-pandemic levels with sales 75% up on 2019. In December, Asda hit its target to create one million delivery slots in the week preceding Christmas and has regained its position as the UK’s second-largest online grocer by market share.
Asda’s operating profit in 2021 increased by 42% to £693.1m (2020: £486.5m) compared with the previous year.
The rise in operating profit was predominantly due to a reduction in Covid-related costs compared with the previous year. These costs represent the significant investment Asda made in 2020 to keep colleagues and customers safe, including shielding 15,000 clinically vulnerable colleagues on full pay for 12-weeks, hiring 22,000 temporary colleagues to cover absences and manage increase demand, and providing 2.6m home deliveries free of charge to shielding customers.
During 2021, Asda continued to invest in its strategy to provide customers with more convenient ways to shop and give them more exciting reasons to visit stores.
The supermarket, in partnership with EG Group, opened 31 Asda On the Move convenience stores last year at roadside and neighbourhood forecourt locations and the ambition remains to roll these stores out to all EG Group sites in the UK. Asda and EG have also introduced EG foodservice brands such as LEON, Cinnabon and Sbarro in 17 stores and aim to increase this figure to 100 locations by the end of this year.
In addition to developing new channels, it remains a priority for Asda to improve the shopping experience in existing stores and help customers fulfil multiple shopping missions when they visit. Over the last 18 months Asda has collaborated with more than 40 different partner brands and has more than 1,000 partnership propositions across 400 stores. The focus for this year is to roll out the most successful partnerships which are ready to scale.
Recognising that fresh produce is a key consideration for many consumers when choosing where to shop, Asda invested more than £10m during the last 12 months to improve the product, packaging and customer experience in the produce department. This investment includes the appointment of 250 specialist Green Grocers in stores focused on quality standards and stock availability. The changes have been positively received by customers, with Asda currently trading ahead of the market in fresh produce.
*All sales figures referenced in this release exclude fuel revenues.