Andy Bond, chief executive of Asda, has received “strong personal assurances” from Wal-Mart, the owner of the supermarket chain, that it is still committed to the UK market.
Mr Bond told the Financial Times that Asda had “always been the jewel in the crown” of Wal-Mart’s international operations.
He added that Wal-Mart took the right decision to withdraw from Germany when it sold its 85 stores there in July at a pre-tax loss of $1bn.
“I feel very confident about the decision senior leaders are making,” said Mr Bond. “Asda is a very significant part of international sales and profitability.”
The chief executive’s comments come as Asda outlines its growth strategy for the next 18 months, having missed its profit targets for the last four quarters. He pledged to improve customer service, add more premium products and keep operating costs down. He said Asda was on track to a full recovery by the end of 2007.
After 15 months in the driving seat, Mr Bond said he was “pretty confident and bullish” about the retailer’s prospects, as the chain hit the sales target set by Wal-Mart over the last quarter, ending an 18-month run of misses.
“In a relatively short space of time that decline has turned around and underlying sales are in positive figures,” he said.
He also stressed that Asda had only “moderately” missed profit targets in the quarter. “We have been getting sales recovery without trashing profitability,” said Mr Bond.
Asda’s slow recovery comes as Wal-Mart struggles with its international operations, which account for about a fifth of the group’s turnover.
Its abrupt withdrawal from Germany — which brought about a quarterly fall in Wal-Mart’s profits for the first time in 10 years — came on the heels of its retreat from South Korea in May.