Debt-laden supermarket chain Asda saw revenues grow by 6.6% in the first quarter as its store estate expanded to record numbers with the group's move into convenience retailing.

Owned by the billionaire Issa brothers and TDR Capital, the UK's third-largest supermarket group raked in £5.3 billion in the first three months of this year as like-for-like sales grew by 1.4% amid cut prices to compete with German discounters Aldi and Lidl. Sales of its George clothing line were particularly strong, up 3% on a like-for-like basis.

During the period the company completed the conversion of approximately 470 convenience sites acquired from the Co-op and EG UK, taking its store estate to a record of more than 1,200 sites. The £438 million deal for 132 Co-op shops closed in October 2022, while the £2.07bn acquisition of EG Group's petrol forecourts in the UK and Ireland closed in October of last year.

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During the quarter Asda cut food prices by an average of 17% as part of its commitment to match Aldi and Lidl - whichever is cheapest - on 280 household staples such as milk, bread, cheese and vegetables. Since then it has announced further cuts worth £70m, bringing prices down by 11% on average.

“Asda made good progress against its strategy in the quarter, laying the foundations for long-term success – including completing the conversion of our newly acquired sites to Asda Express, as part of our strategic expansion into the growth markets of convenience and food-to-go," said Mohsin Issa, who has said he will step back from the day-to-day running of the business and appoint a chief executive.

"We did this while continuing to deliver great range, value and convenience, including investing in lower prices and the quality of our food and non-food at a time when the household budgets of our customers remain under pressure."

In May the supermarket group announced that it had refinanced £3.2bn of its £3.8bn debt pile amassed as part of the EG deal and the acquisition of Asda from Walmart in 2021. The lending arrangements will pay higher interest rates but do not need to be repaid until 2030 and 2031.