British supermarket group Asda ended its 22 years under Walmart 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, today reported a 5.1% rise in same-store sales over the three months to December 31 - an improvement on third-quarter growth of 2.7%.
All of the UK's 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.
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 £780m with the rest of the deal financed through £3.5 billion of debt, the sale of Asda's 322 petrol forecourt sites to their own EG Group for £750m 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 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.