Is Asda morphing into Walmart?
Last week, Asda announced plans to refresh its brand for the first time since 2002 as it pledged to boost ‘connectivity’ with parent Walmart. But with the new logo and slogan identical to Walmart’s own, is the British supermarket shifting away from its roots?
Asda’s chief executive Andy Clarke says the branding changes, which will be rolled out across Asda’s estate over the next two years, will ‘boost connectivity with Walmart’ while insisting that the ‘powerful’ Asda brand is here to stay.
“Brands have to go through change, we are about to invest £600m across our estate in building new stores and revamping existing ones,” said Clarke at a press briefing last week. “This isn’t about trying to bring in another type of customer or to change Asda, which is still very much a loved British brand, into Walmart. Quite simply, the timing just makes sense.”
The big-four supermarket will adopt Walmart’s ‘Save Money, Live Better’ slogan while also taking up the US retail giant’s sunshine logo.
The move definitely isn’t the first step towards a Walmart UK invasion, according to Kantar Retail’s insights director Bryan Roberts.
“Walmart has learned the hard way in Germany and South Korea that using its brand in foreign markets isn’t always a recipe for success,” he explains.
“Asda is a brand worth keeping. What ‘Save Money Lives Better’ does do is shift the focus away from price and attract a more aspirational customer. With the rise of the discounters and Asda’s first drop in annual sales since 2008, it will welcome anything it can to broaden appeal right now.”
Asda remains an imperative part of Walmart’s international portfolio, with the US retailer increasingly looking to the big-four supermarket for inspiration over recent years in areas such as grocery home shopping, food sourcing and fashion.
A number of senior Asda directors, including former finance director Judith McKenna and COO Mark Ibbotson, have also crossed the Atlantic ocean to work for Walmart.
There is now evidence that Asda, however, which still has around 20 Walmart-branded supermarkets within the UK, is starting to utlise more of its parent’s expertise.
In November 2013 Asda used Walmart branding in its advertising for the first time as it became the first UK supermarket to import the US Black Friday shopping phenomenon.
“After previously leveraging its expertise mainly to keep cost down, Asda, over the past 12 to 18 months has started to import even more Walmart practices behind the scenes and in the public eye too [with Black Friday],” says Planet Retail’s Natalie Berg, who isn’t convinced imitating Walmart is the best approach.
“Asda should be cautious though. When Walmart converted to the ‘Save Money, Live Better’ slogan and revamped its stores, which Asda is also doing, it backfired and alienated its core working class customer.”
Berg says the new slogan has striking similarities to Aldi’s ‘Spend a little, live a lot’ and says this could actually ‘muddle the customer’ due to a lack of brand clarity.
With each of the big four continuing to lose share to Aldi and Lidl – Asda’s like-for-like sales dipped 2.6% over the Christmas quarter – Roberts believes Asda’s brand refresh could push its biggest rival into action.
“Tesco’s Every Little Helps is very old now and less resonant than before – this will probably kick start them into action,” he adds.
Berg concludes: “It is important not to get too carried away with this as Asda is long overdue a brand refresh. Walmart and Asda are chasing the same customer so this makes sense.”