Wal-Mart's Asda shows strong growth, eyes Russia

By Rachel Sanderson

LONDON (Reuters) - Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) said on Tuesday its British grocer Asda had delivered a strong first quarter thanks to an increase in customer traffic driven by lower prices and discount campaigns.

Like-for-like sales excluding petrol and stripping out an early Easter and the effect of an extra leap day rose 6.4 percent. Total sales increased in the "high single digits" for the three month period to March 31.

"Asda has continued to win the United Kingdom -- delivering a strong first quarter, with 30 basis point of market share growth, despite a challenging economic environment," Wal-Mart International Vice Chairman Mike Duke told a conference call.

The upbeat figures come against worse-than-expected national data from the British Retail Consortium showing like-for-like retail sales falling for the second consecutive month, a trend not seen for more than three years.

Asda, which competes against leader Tesco (TSCO.L: Quote, Profile, Research), J. Sainsbury (SBRY.L: Quote, Profile, Research) and WM Morrison Supermarkets (MRW.L: Quote, Profile, Research), had "healthy" sales in April, with strong sales of fresh food and its premium brand, Extra Special, Wal-Mart said.

Wal-Mart, the world's largest retailer, operates about 6,000 stores worldwide including more than 3,000 stores in 13 countries outside the United States and it is starting to shift more investment away from its saturated home base.

Total sales from Wal-Mart International rose 22 percent in the first quarter to $23.94 billion. Sales at U.S. stores open at least a year rose 2.9 percent. [nN13361838].

Duke said Wal-Mart International, which opened its first stores in India last month with joint venture partner Bharti Enterprises, was also taking "active steps" to research Russia and nearby countries in Eastern Europe.