UK retailer Asda funnels €253m of online sales to Ireland
Published 19/10/2016 | 02:30
UK retailer Asda - owned by US giant Wal-Mart - funnelled £228.2m (€253.4m) of online grocery sales through its Irish unit last year.
The Irish subsidiary is used to process revenue from the sale of its groceries through all its online channels, including the Asda.com website, as well as phone and tablet applications.
The 'Sunday Independent' revealed in 2014 that Asda had established the Irish unit to process payments.
The retailer - which posted sales last year of £22bn - said at the time that the Irish unit was being set up in order to help cut costs.
That year, Asda had posted online sales of about £1bn and said it planned to increase that figure to £3bn by 2019.
Leeds-based Asda did not say precisely how the Irish arm would help it to reduce costs.
However, it was keen at the time to point out that the unit was not being established as a tax-related move.
The subsidiary is liable for UK corporation tax. A spokeswoman had described the decision to set up the Irish firm as a "housekeeping" exercise and that it was "about reducing the cost of processing credit card charges for online grocery shopping".
Newly-filed accounts for the division - Asda Home Shopping Cards - show that revenue hit £228.2m last year, and that it made an operating profit of £307,000.
The accounts also note that the principal activity of the company is to process and manage credit card transactions, and to provide card payments and payment solutions on behalf of other fellow subsidiary undertakings of Asda.
The revenue figure excludes VAT.
"Revenue is derived from the principal activities in the United Kingdom and is recognised net of coupons and the free element of multi-save transactions," note the accounts. "All revenue is generated from the sale of groceries through online channels, including the Asda.com website, phone and tablet applications." Asda has been struggling in a fiercely competitive UK grocery market, shedding market share to rivals such as Lidl and Aldi.
In July, Wal-Mart took a step towards trying to shore up the business, when it appointed the then head of its Chinese unit, Sean Clarke, to take over at Asda.
Accounts for Asda show that its like-for-like sales, excluding VAT and fuel, fell 4.7pc last year to just over £20bn.
Its underlying operating profit declined 1.5pc to £1.04bn.