Asda invests £70m in new Just Essentials budget range

theguardian.com:

Asda is investing £70m into a new range of cut-price essentials after coming under heavy criticism for limiting access to its cheapest items and reporting a 42% boom in profits.

Asda, which was criticised by food campaigner Jack Monroe over shortages of its cheapest items, is launching the cut-price range of 300 items called Just Essentials by Asda from May. It will cover household essentials such as toilet roll and shampoo as well as fresh meat, fish and poultry, frozen items and cupboard staples such as tinned tomatoes.

The retailer, which said it has hiked supermarket prices by about 5% as it wrestles with rising food inflation, said the full range would be available in all its 581 stores and online and would eventually replace its existing Smart Price budget range.

In its first full year of ownership by petrol station tycoons Mohsin and Zuber Issa, Asda said sales rose just 0.6% to £20.4bn in the year to 31 December 2021 but profits swelled 42% to £693.1m, which it said was mainly down to cutting pandemic costs. The supermarket struggled to beat strong sales in 2020 when families were forced to stock up for home cooking as restaurants, bars, cafes and many workplace and school canteens were closed for long periods.

Asda said its uptick in sales for the year was driven by strong trade in homewares, garden kit and clothing after pandemic-related disruption in 2020. However, the retailer is also facing increasing competition from fast-growing discounters Aldi and Lidl, which continue to open stores and have stolen Asda’s crown as the cheapest option on many groceries.

Asda’s sales were particularly poor during the busy Christmas period, falling 2.9% in the final three months of the year on the same period a year earlier.