Asda's first-quarter sales boosted by coronavirus stocking-upAsda's first-quarter sales boosted by coronavirus stocking-up
File photo of a company logo pictured outside an ASDA supermarket near Manchester in Britain

LONDON (Reuters) – Asda, the British supermarket arm of the world’s biggest retailer Walmart, said on Tuesday its first-quarter comparable sales rose 3.5%, boosted by consumers stocking-up on food in response to the coronavirus crisis.

It said higher growth in food was partially offset by weaker demand for apparel.

The growth compares with a decline of 1.3% in the previous quarter.

However, Asda said both its gross profit rate and its operating income decreased in the period.

The fall in the gross profit rate primarily reflected a change in mix towards lower margin categories in response to COVID-19.

Asda also said it faced incremental costs related to the pandemic.

The group is the last of Britain’s big four grocers to report on the first quarter.

Market leader Tesco has estimated a hit of up to 925 million pounds ($1.13 billion) from the costs of dealing with the crisis, while Sainsbury’s warned the impact on current year profit could be over 500 million pounds. No. 4 player Morrisons has estimated additional costs of about 230 million pounds.

Industry data has showed UK grocery sales hit record levels in March as shoppers stocked up ahead of the coronavirus lockdown.

Growth slowed in April but was still robust as Britons made fewer shopping trips but spent more when they did venture out.

($1 = 0.8170 pounds)

(Reporting by James Davey, Editing by Paul Sandle)