LONDON (Reuters) – Asda, the British supermarket arm of Walmart <WMT.N> that is set to be acquired by Sainsbury’s <SBRY.L>, posted a 13 percent fall in profit in 2017, a performance which it said was in line with expectations and showed its recovery was on track.
Sainsbury’s and Asda announced plans to combine in April in a deal which will see Britain’s no.2 and no.3 supermarkets respectively overtake Tesco <TSCO.L> as Britain’s biggest supermarket group.
The deal comes just as a turnaround plan for Asda gains momentum, with Asda saying it returned to underlying sales growth in 2017, posting sales up 0.5 percent, a big improvement on the 5.7 percent fall it reported last year.
Asda said it had benefited from investing in lower prices for customers and improved service in stores and online.
Statutory accounts for Asda Group Limited published on Thursday show that operating profit came in at 735.4 million pounds compared to the 845.3 million pounds it made in 2016.
“Our 2017 accounts reflect a solid performance and a strong, well-managed business,” said Asda President and CEO, Roger Burnley.
“During the year momentum returned driven by a series of planned investments in lowering prices, further improving quality and innovation in our Own Brand ranges and providing an even better shopping experience whether in store or online.”
(Reporting by Sarah Young; editing by Kate Holton)