Asda sales growth slows in UK

Britain's second-biggest supermarket chain behind Tesco said on Thursday that sales at stores open for more than a year, excluding fuel and VAT sales tax, were up 0.1% in the 14 weeks to Jan. 5, its fiscal fourth quarter. That followed a third-quarter rise of 0.3%.

Britain's grocers are finding growth hard to come by, despite their focus on essential goods, as consumers fret over job security and a squeeze on incomes.

Last month Tesco posted a 1.8% rise in like-for-like sales for the six weeks to Jan. 5, against a weak figure in the previous year. Sainsbury's, the No. 3 grocer, reported a 0.9% rise in like-for-like sales for its third quarter to Jan. 5, while No. 4 player Morrisons saw like-for-like sales fall 2.5% in the six weeks to Dec. 30.

The grocers have also been battling to restore consumers' trust after becoming embroiled in a horsemeat scandal that is still spreading across Europe.

Last week Asda found horse DNA in a beef Bolognese sauce. It withdrew the product from sale, along with three other beef-based products produced by supplier Greencore.

The performance of Asda, which trades from 555 UK stores serving more than 18 million shoppers a week, reflects its focus on low prices for key commodities such as bread, milk and eggs, as well as revamped fresh-food lines and increased penetration of own-brand ranges.

The company has also benefited from its price guarantee, offering to refund customers the difference, via a voucher, if an online price comparison website does not show their shopping is at least 10% cheaper than at a rival.