Asda price guarantee 'threw rivals'

Asda has highlighted further signs of sales momentum as it claimed its price guarantee initiative had “ruffled” the feathers of rivals.

The UK’s second biggest supermarket chain said like-for-like sales increased by 1.6% in the final quarter of 2010 after it revamped its own label ranges and introduced a guarantee in April that its prices would be cheaper than those of its rivals.

Since it improved its price guarantee in January by pledging to sell groceries at least 10% cheaper than its major rivals, the scheme had been used by 800,000 customers.

Asda’s sales performance in the final quarter of 2010 was helped by a “good Christmas” for the group as it bounces back after six months of declining sales in the first and second quarters of its financial year.

Last year it relaunched its mid-tier own label range as Chosen By You and revamped its Extra Special premium range after chief executive Andy Clarke, who took over in May, admitted it had not focused enough on the quality of its food.

Asda announced on Tuesday that it would launch another 2,000 products under the Chosen By You range, bringing the total to 5,000, and said Extra Special was now the fastest growing premium range of its supermarket rivals.

The supermarket, which has 386 stores in the UK, does not announce profits figures but claimed they grew ahead of sales.

Mr Clarke said he was “pleased with the progress we’ve made in the last six months”.

He said: “The Asda Price Guarantee is a game changer – our customers are starting to use it more. The renewed focus on everyday low pricing underpinned by the Asda Price Guarantee has got our rivals a little ruffled.

“We have enhanced the quality of our products at no extra cost to our customers.”