UPDATE 1-UK’s Asda says Brexit uncertainty affecting prospects

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LONDON, Aug 15 (Reuters) – Asda, the British grocery store arm of U.S. retail big Walmart, mentioned uncertainty surrounding Brexit was affecting its prospects because it eked out a small rise in second quarter gross sales, helped by the later timing of Easter this 12 months.

Britain’s new prime minister Boris Johnson has promised to take Britain out of the European Union by Oct. 31, with or and not using a deal, setting the scene for a showdown in parliament the place lawmakers are against a divorce and not using a transition settlement.

Asda, whose proposed takeover by rival Sainsbury’s for 7.three billion kilos ($8.Eight billion) was blocked by Britain’s competitors regulator in April, mentioned on Thursday its like-for-like gross sales rose 0.5% in its fiscal second quarter to June 30.

That compares with a decline of 1.1% within the earlier quarter, or an increase of 0.5% adjusted for the later timing of Easter this 12 months.

“If ever a case research on the influence the temper of the nation has on UK spending habits have been wanted, this quarter has supplied it,” mentioned Asda Chief Govt Roger Burnley.

“Shopper confidence ranges are at an virtually six-year low – due in no small half to the continued uncertainty round Brexit and amplified by the influence of climate and monitoring in opposition to nationwide sporting occasions in the identical interval final 12 months,” he mentioned.

Burnley mentioned that whereas Asda’s meals enterprise “carried out nicely” and on-line progress outpaced the market throughout the interval, its non-food enterprise was “challenged”.

Asda mentioned its gross revenue price declined, reflecting elevated gas gross sales with decrease margins, comfortable demand for higher-margin basic merchandise and value cuts.

Trade knowledge revealed final month confirmed all of Britain’s massive 4 grocers – market chief Tesco, Sainsbury’s , Asda and Morrisons – noticed complete gross sales fall within the 12 weeks to July 14. The dip mirrored a heatwave and the boys’s soccer World Cup a 12 months earlier which boosted demand. (Reporting by James Davey; Enhancing by Kate Holton and Susan Fenton)

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