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UPDATE 1-Asda sales growth slows

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(Globalpost/GlobalPost)

* Growth slows from 0.3 pct rise in Q3

* Parent Wal-Mart posts higher quarterly profit

LONDON, Feb 21 (Reuters) - Asda, the British arm of U.S. retailer Wal-Mart, said underlying sales growth had slowed in the fourth quarter of its financial year as consumers tightened spending.

Britain's second-biggest supermarket chain behind Tesco said on Thursday that sales at stores open for more than a year, excluding fuel and VAT sales tax, were up 0.1 percent in the 14 weeks to Jan. 5, its fiscal fourth quarter.

That followed a third-quarter rise of 0.3 percent.

Britain's grocers are finding growth hard to come by, despite their focus on essential goods, as consumers fret over job security and a squeeze on incomes.

Last month Tesco posted a 1.8 percent rise in like-for-like sales for the six weeks to Jan. 5, against a weak figure in the previous year. Sainsbury's, the No. 3 grocer, reported a 0.9 percent rise in like-for-like sales for its third quarter to Jan. 5, while No. 4 player Morrisons saw like-for-like sales fall 2.5 percent in the six weeks to Dec. 30.

The grocers have also been battling to restore consumers' trust after becoming embroiled in a horsemeat scandal that is still spreading across Europe.

Last week Asda found horse DNA in a beef Bolognese sauce. It withdrew the product from sale, along with three other beef-based products produced by supplier Greencore.

The performance of Asda, which trades from 555 UK stores serving more than 18 million shoppers a week, reflects its focus on low prices for key commodities such as bread, milk and eggs, as well as revamped fresh-food lines and increased penetration of own-brand ranges.

The company has also benefited from its price guarantee, offering to refund customers the difference, via a voucher, if an online price comparison website does not show their shopping is at least 10 percent cheaper than at a rival.

Asda's sales update was released as parent Wal-Mart posted a higher quarterly profit and raised its dividend payout on Thursday.

http://www.globalpost.com/dispatch/news/thomson-reuters/130221/update-1-asda-sales-growth-slows