Asda CMO: ‘Rivals’ price matching schemes are anti-competitive’

Asda’s marketing chief says he finds rivals attempts to match each other’s prices ‘anti-competitive’ and that it will continue to communicate its 10 per cent cheaper message.

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Asda’s Christmas marketing campaign focuses on its 10 per cent cheaper price promise

Speaking at an event in London yesterday (14 November) CMO Stephen Smith criticised price matching schemes such as Sainsbury’s Brand Match, which offers to match rivals’ prices for branded goods, and Tesco Price Promise, which includes branded and own-brand grocery products.

“It is strange to me that our competitors are touting how much they match prices and are working towards parity. I find it almost anti-competitive that large competitors are talking about and proud to be matching each other’s prices. We are the only ones standing up and saying we’ll be 10 per cent cheaper,” he said.

Asda’s Christmas marketing this year, while expanding to encompass quality, will still “relentlessly” focus on price. That includes taking a dig at rivals with its 10 per cent cheaper price promise and an “aggressive” spot the difference campaign.

In a shift from last year, it won’t focus on any sort of vouchering or money-off coupons. Smith criticised rivals for investing in promotional gimmicks by offering vouchers while at the same time increasing prices.

Asda has announced it is putting £1bn into keeping prices low over the next five years, £400m more than it previously planned to invest.

“When our competitors voucher, somebody has to pay for those vouchers. We see it as their customers are paying and that’s not a direction we want to go. They invest in gimmicks, we invest in price,” he said.

Asda’s Christmas marketing message continues its focus on pricing, taking aim at rivals with a snowman ad that reinforces the 10 per cent cheaper price. It is also planning to push a quality message and highlight key items such as its wines and bakery selection in the run-up to Christmas, deliberately eschewing rivals’ emotional brand messages.

”This year we’ve got a very integrated trading plan that is all based around big bets. We’ve built a campaign that is much more hardworking, delivering lots of messages.

“I love watching other people’s ads. Would I have done them? Probably not. But I’m not in their seats, I don’t know their business plans.”

Speaking to Marketing Week separately, Asda’s head of social media, Dominic Burch, said posts about its Christmas snowman ad reached 2.7m people on Facebook through a combination of organic and paid-for reach, with the supermarket spending around £3,500 boosting posts. Overall, he said Asda reaches around 9m Facebook users a month.  

Smith said the supermarket has a “rule” on social media that it posts 9 messages that are “fun, engaging and build a conversation” before it posts any commercial message.

“It’s a really simple rule, but what it’s doing for us is building a relationship with our Facebook fans.

“We do a lot of research on understanding those customers and they are our most loyal customers, they are our advocates. When times are tough they will defend us and they keep us honest,” he said.

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