Case study: Asda

It seems that starting a price war pays off. Budget supermarket Asda’s brand value has risen by more than a third from £4.12bn to £5.64bn, moving up seven places to ninth in the Brand Finance UK’s most valuable brands league table.

Asda strategic communications director Nick Agarwal insists that ongoing economic instability and public insecurity means that a value proposition is still crucial to the supermarket sector. He claims: “Our internal data suggests that people are still very nervous about what will happen on the economic front this year.

“We need to make sure we serve new customers as well as those who are still feeling financially challenged, especially with the increase in VAT and public sector cuts that are to come. We are very conscious that value is still going to be at the heart of what people want in the coming 18 months.”

Being a low price champion, not just in groceries but also in clothing, has helped to improve the supermarket’s image over the past year. BrainJuicer’s emotional scoring shows that consumers feel more positive towards the retailer this year, compared with 2009, considering the supermarket to be “good value for money”.

The George clothing brand has become a key part of what Asda offers, claims Agarwal. “It claimed the top spot for volume sales in the last calendar year ahead of Marks & Spencer, Primark and Debenhams. Clearly that shows how positively customers responded to us last year.”

However, an improvement to Asda’s core offering has also had an effect on the retailer’s brand image, he suggests. The supermarket has overhauled the majority of its UK own-label food and drink lines, with an increased focus on locally sourced produce. It also introduced a premium range last year, as upmarket competitor Waitrose introduced its own value “Essentials” line.

“Over the last year we have increased the quality of our food range, particularly what we do from a local sourcing perspective, such as stocking Cartmel sticky toffee pudding in Cumbria or stocking our meat counter in Hounslow from a local concessionaire,” explains Agarwal.

“There is still work to do but we are getting better at tailoring our ranges to the needs of local communities. That adds to a better customer perspective of us.”

To read the full cover story on the top British brands click here

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