Asda claims its profits fell by nearly a quarter last year because they didn’t inflate prices
PROFITS fell almost a quarter at supermarket giant ASDA last year — because it didn’t pass on rising cost price inflation to customers, it claims.
Mohsin Issa, Asda’s co-owner, said: “We took a decision to support customers by investing heavily to mitigate the impact of inflation and keep prices as low as possible.”
He said it was “the right thing to do” even though it hit profits because it “will ultimately help to deliver long-term growth”.
By helping consumers cope with the cost of living crisis, the supermarket chain hoped to benefit from bigger sales.
The policy paid off — sales climbed despite the profits slump.
Profits fell 24 per cent in 2022 to £886million, down from £1.17billion the previous year.
But sales over a two-year period saw a small increase of 0.1 per cent.
Excluding German discounters Aldi and Lidl, Asda was the best performing traditional supermarket during the festive period.
It enjoyed a boost in sales — up by 6.4 per cent year-on-year in the 12 weeks to Christmas Day, according to analysts Kantar.
The chain is owned by the billionaire Issa brothers and private equity backers TDR Capital.
Mohsin Issa said he was pleased with the progress of “laying the foundations to restore Asda to the number two position in UK grocery.”
They have launched two new Asda Express convenience stores — in Sutton Coldfield and Tottenham Hale.
It plans to open a further 30 this year, beginning with Calne in May and Romford train station in June.
APPROVALS for mortgages rose for the first time in six months in February to 43,500, up from 39,600 in January, the Bank of England said.
Broker SPF Private Clients said the news was “encouraging”.
ONE SHELL OF A YEAR OF PROFIT
SHELL paid around £7million in UK taxes last year, despite writing down its tax bill by around £34million.
But it was the first time the oil giant paid more in UK tax that it was able to write off since 2017.
It also paid £8million in fees to the UK government in 2022 — a year in which it also recorded its biggest ever global profits of £32billion.
Meanwhile OVO Energy is plotting to snap up Shell’s UK gas and electricity business, which has around 1.4million customers.
Shell bought the business in 2018.
WARY NEXT STEPS
FASHION chain Next said it would raise prices more slowly in the next 12 months after it surprised investors with better profits than expected.
Pre-tax profits climbed 5.7 per cent to £870.4million for the year to January, about £10million more than anticipated.
Sales rose 6.9 per cent year on year but downbeat predictions for 2023 sent shares crashing.
Finance chief Amanda James said: “I think it’s going to be a challenging year.”
The retailer confirmed earlier this week that it was buying fashion and homeware brand Cath Kidston out of administration for £8.5million.
BUPA AXE FALLS ON DENTISTS
A SHORTAGE of dentists is forcing BUPA Dental Care to axe 85 of its dental practices.
The move will put 1,200 staff at risk of losing their jobs.
The 85 practices will be closed, sold or merged, reducing the health insurer’s UK dental estate to 365.
The company employs 9,000 staff but said it has not been able to recruit enough dentists to deliver NHS care in many practices for months and in some cases years.
Manager Mark Allan said: “Our priority must be to enable patients to receive the care they need.”
It will hand back the dental contract to the NHS for practices that are set to close, meaning commissioners can find a new provider in the area.
The British Dental Association said: “NHS dentistry is a service built on sand.
“Years of failed contracts and underfunding have taken their toll and more will inevitably follow.”
SHARES
BARCLAYS up 4.84 at 142.02
BP up 2.70 at 510.50
CENTRICA up 2.05 at 104.00
HSBC up 12.90 at 554.00
LLOYDS up 0.73 at 47.13
M&S up 0.90 at 159.70
NATWEST up 1.40 at 261.10
ROYAL MAIL up 3.10 at 264.20
SAINSBURY’S up 3.00 at 267.80
SHELL up 35.00 at 2,298.00
TESCO up 7.60 at 262.50
OLD BOSS RETURNS
FRESH from bailing out rival Credit Suisse, Swiss bank UBS has brought in ex-boss Sergio Ermotti to be its new chief and oversee the merger of the two finance houses.
The bank said it acted “in light of the new challenges and priorities facing UBS”.
Earlier this month UBS rescued Credit Suisse in a cut-price £2.64billion deal .
Mr Ermotti led the bank after the 2008 financial crisis — and the group for nine years until he stepped down in 2020.