Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Britain's Asda ends Walmart era on the up

Stock MarketsFeb 18, 2021 08:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A worker pushes shopping trolleys at an Asda store in West London, Britain 2/2

By James Davey

LONDON (Reuters) - British supermarket group Asda ended its 22 years under Walmart (NYSE:WMT) ownership with accelerating underlying sales in the Christmas quarter, driven by strong demand for premium ranges.

Asda, now owned by the Issa brothers and private equity group TDR Capital, on Thursday reported a 5.1% rise in same-store sales over the three months to Dec. 31 - an improvement on third-quarter growth of 2.7%.

All of Britain's major supermarket groups performed strongly in the Christmas period, with coronavirus restrictions closing the hospitality sector and forcing many people to work from home.

"Asda’s growth during the period was driven by a notable shift in shopping behaviour, with customers trading up and spending more on premium categories at Christmas to treat themselves after a difficult year," it said.

Asda highlighted December sales of premium lines up 30% year on year and a 76% jump in online sales during the quarter.

The billionaire brothers and TDR completed the purchase of a majority holding in Asda from Walmart on Tuesday in a deal giving it an enterprise value of 6.8 billion pounds ($9.5 billion).

The deal still requires regulatory approval, with the parties subject to an enforcement order from the Competition and Markets Authority (CMA) to ensure Asda continues to operate independently from its buyers while it conducts its investigation.

The CMA has set an April 20 deadline for a ruling. The brothers and TDR have said they "remain confident" of a positive outcome.

The brothers and TDR are contributing only 780 million pounds, with the rest of the deal financed through 3.5 billion pounds of debt, the sale of Asda's 322 petrol forecourt sites to their own EG Group for 750 million pounds and the sale of its distribution centres.

While the brothers and TDR have called the capital structure "robust", some within Asda are uncomfortable with the level of debt, which is higher than rivals, and the planned sale of the petrol stations, said one source with knowledge of the situation.

The brothers have pledged to invest more than 1 billion pounds in Asda over the next three years.

Walmart will retain an equity investment in Asda, with an ongoing commercial relationship and a seat on the board.

Britain's Asda ends Walmart era on the up
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email