Asda chief executive Archie Norman is like a child with a new toy, now that he has taken on the role of head of marketing following the sudden exit of marketing director Michael Fleming .
But some observers doubt he has sufficient time to take on the day-to-day running of the chain’s 17m (Register-MEAL) ad budget. They refuse to believe the new set-up is permanent.
Asda says Norman is well qualified for the job, having been in charge of marketing since January 1994, after marketing director Allan Leighton’s switch to an operations role. But this disguises the fact that the main reason Norman spent so long as acting head of marketing was because Asda had such difficulty finding a replacement for Leighton.
Norman has, in reality, always been the driving force behind Asda’s marketing. He has built a reputation as a hands-on chief executive, who insists on previewing every TV and press advertisement, and every door drop, that the chain produces.
Norman developed the recovery strategy that has put Asda into third place in UK grocery retailing. But now the chain is passing into a new phase of development, where marketing will undoubtedly play a key role. As chief executive, Norman has nursed the chain back to recovery. Profits increased by 35 per cent last year to 246m and like-for-like sales grew by 8.5 per cent.
Since becoming chief executive in 1991, he has taken Asda back to its roots as the store for “ordinary working people with families”. In the Eighties, the chain lost its way by trying to portray itself as the “Sainsbury’s of the North”.
A “renewal” format has been developed for its 203 stores. Unprofitable ones have been sold or converted to the Dales discount format. Norman has brought Asda back full circle, and established it firmly on a “value” platform. He has rejected any attempt to move away from the “pocket tap” visual device, even though it has been criticised for being outdated.
Asda has to build on Norman’s achievements. It is moving into what he calls its “breakthrough” phase, and will build new stores and introduce another format – the “market hall” style, where the store’s interior mimics an old-fashioned street.
There will also be a greater emphasis on own-label grocery products, which it is believed will increase from 32 per cent to 37 per cent of the chain’s stock.
Asda may also launch a national loyalty scheme. It is testing various formats in 20 of its stores.
All this adds up to a lot of day-to-day work for whoever is in charge of marketing. City analysts, and other observers, are sceptical about Asda’s claim that Norman will be that person. Leighton’s promotion was seen as an acceptance that Norman was taking a more strategic role.
“It makes no sense, knowing the task ahead. You would think Norman and Leighton would want to delegate responsibilities. I can’t believe Norman will be permanently in the marketing role,” says one source. But an Asda spokesman is adamant that Norman will be running the show for the “foreseeable future”.
While the other supermarket chains move onto the service platform – with campaigns promoting everything from baby changing facilities to bag packing – Asda has gone for a “Hovis” style, back-to-basics approach. It is hoping to steal customers from its rivals by not deviating from its value positioning. Norman is not for turning.
Insiders say he is hyper-active, autocratic and claustrophobic to work for. Few are surprised the two senior marketers he recruited over the past year, Fleming and David Bradley, have gone and that Norman has installed himself as head of marketing.
They suggest the role of marketing director will never be much more than that of an ad manager – with little scope to shape the direction of the chain, or even the style of the ads. That is all firmly in the domain of Norman and his right hand man, deputy chief executive Leighton.
Asda says Fleming left because he could not settle in the North. But few people believe that version of events. Rumours about his departure have been circulating virtually since the day he arrived in January.
Later there were claims that Fleming clashed with Norman and had little control over marketing. Fleming is known to have spoken to several ad agencies, raising their hopes that the supermarket was to review its account out of Publicis. But agencies with more long-term ambitions aligned themselves with Norman, underlining Fleming’s increasing isolation.
Norman spent a year hunting for Fleming. He was previously marketing director at Somerfield for 18 months, and worked with chief executive David Simons to turn round the chain’s fortunes. Together they changed the store’s name from the down-beat Gateway to the fragrant-sounding Somerfield, and introduced the Price Check initiative.
But while Fleming was working out his three months’ notice at Somerfield, Asda recruited the man who was to be his deputy, former SmithKline Beecham marketing director, David Bradley. He lasted six weeks. Bradley was brought in as general manager for communications, but sources suggest that he collided with Norman’s over-bearing style. This should have set the alarm bells ringing for Fleming.
Bradley realised he would have little room for manoeuvre in his new position – his role was effectively reduced to that of ad manager. The real business of marketing was under the firm control of Norman and his right-hand man, Leighton.
“Losing two marketing directors in quick succession is an embarrassment for the chain, and for Norman in particular,” says one source.
This raises the question of why, if Norman really wanted to run the company’s marketing himself, did he go to so much expense and trouble to head-hunt top marketing executives? “Norman made a mistake, and will privately admit it,” says another source.
Some observers believe that Leighton, the man behind a whole range of off-the-wall ideas to build staff and customer loyalty – including evangelical-style staff training sessions – is being groomed to take over from Norman in about two years.
Norman, it seems, wants to make the cross-over into politics on a right-wing Conservative agenda. He is believed to have been a strong supporter of John Redwood in the recent Conservative Party leadership election.
Analysts believe Norman will seek a replacement for Fleming before too long. It is almost two years since Leighton was promoted, and the head of marketing position has been in a state of flux ever since. Ironically, that does not seem to have affected Asda’s performance – a fact that will not have been lost on Norman as he plays with his new toy.
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