LONDON (Reuters) - Profits at supermarket operator Asda, the British arm of Wal-Mart (NYSE:WMT), surpassed 1 billion pounds for the first time last year, despite a decline in sales and slight loss of market share.
According to annual accounts filed on Thursday, Asda's operating profit rose 1.9 percent to 1.013 billion pounds in the year to Dec. 31 2014, helped by its drive to reduce costs.
That compares with major profit falls last year at all three of Asda's "big four" rivals in Britain, market leader Tesco (LONDON:TSCO), Sainsbury's and Morrisons.
They have all been hurt by a price war, as they attempt to stem the loss of shoppers to discounters Aldi and Lidl, and by commodity-led deflation.
Asda said 2014 revenue fell 0.4 percent to 23.2 billion pounds, sales at stores open over a year decreased 1 percent and UK market share dipped 0.1 percentage point to 17.1 percent.
Asda Chief Executive Andy Clarke launched a five-year strategy in 2013 focused on lower prices but eschewing the money-off vouchers touted by its rivals.
The firm invested 300 million pounds in lower prices during 2014.
However, Asda's sales performance has deteriorated significantly in 2015, with the firm posting like-for-like sales declines of 3.9 percent in its first quarter and 4.7 percent in its second quarter.
The second quarter outcome, Asda's worst performance in the 16 years it's been owned by Wal-Mart, was described by Clarke as the firm's "nadir".
The most recently published industry data put Asda's UK market share at 16.7 percent, down 0.6 percentage points year-on-year.