Can a makeover help Asda?

Can a makeover help Asda?

Asda president and chief executive Andy Bond has underlined his commitment to traditional supermarkets over high street convenience stores by announcing plans to open at least 18 new superstores across the UK this year.

Bond says Asda’s primary objective is to grow its core business, adding that ten new stores equals 500 convenience stores. “They are not the cake,” he says. ” Convenience stores are the icing on the cake.”

Asda has been through some rocky times in recent years and seen its revenues decline in an increasingly competitive grocery market. The supermarket giant, famous for its value proposition, stood still and paid the price as its rivals grew at a phenomenal rate.

Healthier outlook
But it says it will revamp its store format and getting away from its ready-meal reputation by putting greater emphasis on healthier groceries. The retailer is installing more counters and will increase its offering of organic and Extra Special goods. It is rolling out its new café format to all stores over the next 18 months and will stock more goods for special events such as Halloween.

It is also expanding its Asda Living stores. There are seven at the moment, but a further ten will be rolled out this year, including the first in Northern Ireland.

Alastair Lockhart, senior retail analyst at Verdict, a Datamonitor company, says he would like to see more superstores, but for him the important thing is that Asda keeps growing. “If it had the opportunities it would be rolling out its superstore formats. With the superstores you have the footfall, while with the Living stores you’re creating a destination store that won’t have that same footfall. This isn’t ideal but, that said, it’s difficult to create new superstores and this is a way of getting the shoppers.”

Asda’s new marketing director, Rick Bendel, who joined from Publicis, says the message for customers will be “quality, service offer, craft skills and sourcing”. He wants to see simpler messages that highlight the supermarket’s commitment to healthy food at low prices. “We are going to bring common sense to a market place that has become too complicated,” he says. “We have got to be able to convince all customers that affordability doesn’t mean we cut corners. Value means low price and we are proud of that.”

He says the retailer will also be emphasising its “local” credentials by tapping into employees, suppliers and their families and friends as shoppers – an area in which it has traditionally fallen down, according to Alison Aslin, food retailing account director at Pragma Consulting.

Easy as ABCs
Aslin says she wants to see Asda address its image problem by appealing more to ABCs and stocking some more premium lines in its Living stores. “Asda has got its Extra Special range – now it needs to put something extra special into its Living stores.” “It can come out of this difficult time,” Lockhart says. “And there’s definitely opportunities to turn things around.”


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