Asda, the debt-laden grocery chain, said Aldi and Lidl price matching schemes helped revenue grow by 6.6 per cent in the first quarter of the year.
The UK’s third largest supermarket, which is owned by the billionaire Issa brothers and TDR Capital, cut prices by an average of 17 per cent on more than 280 items to get their prices in line with German discounters.
It comes as both Aldi and Lidl have seen their market share skyrocket amid the cost of living crisis, winning the hearts of cash strapped consumers thanks to low prices.
After the quarter ended, Asda announced new price cuts on hundreds of products worth £70m, reducing prices by an average of 11 per cent.
The supermarket reported a total revenue of £5.3bn and said like-for-like sales increased slightly by 1.4 per cent.
Friday’s announcement follows a report from the company that it has refinanced more than £3.0bn of debt.
Asda currently has a net debt of £3.8bn after it took over parent company EG Group’s UK convenience store business.
The supermarket has also recently secured an upgrade to its corporate rating from Moody’s to B1 from B2, while Fitch Ratings raised their outlook on Asda’s Long-Term IDR to positive from stable and affirmed the IDR rating at B+.
Back in 2021, the Issa brothers, alongside TDR Capital, bought the supermarket which has over 1,000 stores across the UK from Walmart.
In March, Mohsin Issa, one half of the billionaire family duo, confirmed he would eventually step back from the day-to-day running of the business and appoint a chief executive.
It is understood that the recruitment process for a new boss is underway.
Commenting on the results, Mohsin said: “Asda made good progress against its strategy in the quarter, laying the foundations for long-term success – including completing the conversion of our newly acquired sites to Asda Express, as part of our strategic expansion into the growth markets of convenience and food-to-go.
“We did this while continuing to deliver great range, value and convenience, including investing in lower prices and the quality of our food and non-food at a time when the household budgets of our customers remain under pressure.”
On Monday, Asda said it would develop a ten-acre Park Royal site in West London, building 1,500 homes, with a third being ‘affordable’.
If given planning approval, the new site will be a ‘town centre’ linking Old Oak and Park Royal, regenerating the area. It will feature a 60,000-square-foot Asda store and 400 car park spaces.