Asda reports 13% drop in operating profits for 2017

Asda has published its annual Statutory Accounts for the financial year to 31st December 2017, in which it revealed a 13% dip in operating profits.

The accounts for Asda Group Limited includes the financial activities of all Asda stores, distribution centres and online operations including food, clothing, general merchandise and fuel.

The Leeds-headquartered supermarket reported that in the last financial year the its like-for-like sales increased by 0.5%, (compared to a 5.7% decrease in 2016).

Operating profit, however, dropped to £735.4m in 2017 (compared to £845.3m in 2016). Asda said this dip was “driven by planned strategic investments in price, quality and service.”

The supermarket has also reported cashflow from operating activities of £1,289.3m, with net cash inflow for the year £309m. The accounts also confirm that Asda paid £128.4m corporation tax in 2017.

The investments made towards the end of 2016 led to a planned reduction in operating profit.

During 2017, Asda opened one new Home Shopping Centre, three new superstores and five new supermarkets, representing 146,000 sq ft of new space.

Earlier this month, Asda reported its fourth consecutive quarter of growth with a 1.0% increase in like-for-like sales during the first quarter of 2018.

Roger Burnley, Asda president and CEO, said: “Our 2017 accounts reflect a solid performance and a strong, well-managed business.

“During the year momentum returned driven by a series of planned investments in lowering prices, further improving quality and innovation in our Own Brand ranges and providing an even better shopping experience whether in store or online.

“Our customers have responded well to this strategy and the momentum of 2017 has continued into the first quarter of 2018.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →