British supermarket Asda returned to growth in the second quarter of 2017, with customers turning to the retailer for cheaper household goods.
The supermarket, which is owned by US Walmart (NYSE:WMT), reported a rise in sales of 1.8 percent after a strong Easter period.
The return to growth was attributed to the beneficial effect of price cuts, more customers and rising inflation levels, with consumers looking towards more purse-friendly options.
Conversely, last year Asda posted its worst ever quarterly performance with sales falling considerably by 7.5 percent.
Walmart chief executive Doug McMillon commented that he was “encouraged” by the british supermarkets quarterly result
“In June, I visited Asda to see the progress being made. Customers are responding to investments in price and store experience by visiting the stores more often and increasing their basket sizes,” he added.
“There’s still much more to be done, but we’re clearly headed in the right direction.”
Asda is currently the third largest supermarket in the UK after Tesco (LON:TSCO) and Sainsbury’s (LON:SBRY).
Nevertheless, the larger supermarkets have been feeling the pressure of competition from rising retail rivals Lidl and Aldi.
Back in May a survey by Kantar Worldwide indicated that Aldi and Lidl had now reached a 12 percent market share in the U.K, as they continue to expand and attract customer seeking grocery bargains.
Asda’s promising results follow disappointing general retail figures for the U.K in July, according to the latest update from the Office of National Statistics (ONS).
Specifically, sales of all items excluding food dipped, growing by just 1.3 percent year on year. This proved comparatively small to the recorded 2.8 percent rise back in June.
High levels of inflation and falling real wages had meant that consumers had continued to tighten their spending, despite the U.K achieving its lowest level of unemployment in over 40 years.
Shares in Walmart are currently down 2.57 percent in pre-market trading at 13.42PM (GMT).