Williams – who has been in the role since January having taken over from former marketing chief Steve Smith – told Marketing Week today (May 19) that although he is ‘far from satisfied’ with Asda’s current sales slide, a ‘shift’ in its approach to marketing will help it to fight back against the threat of the discounters and a resurgent Tesco.
“Our marketing will have a noticeable, if not radical, shift as I firmly believe a lot of retailers, including Asda, have spent too long talking to one another opposed to communicating with the customer,” said Williams.
“Price will remain a focus in our marketing but we want to communicate that our value stretches beyond price and into quality, technology and the in-store experience as well.”
Williams’ call for Asda to avoid over focusing its brand messaging on rivals follow similar comments from Morrisons’ chairman Andrew Higginson, who recently claimed that the price wars have meant that the big four supermarkets have forgotten to talk to the customer.
Asda will be hoping its new ad strategy, which will be revealed over the next few months, can spark footfall into its stores after posting a 3.9% fall in like-for-like sales for the 15 weeks to 19th April. The fall marked a continuation of the 2.6% fall in like-for-like sales Asda reported for the 12 weeks to 4 January.
Speaking at a press briefing, Asda’s CEO Andy Clarke, although admitting that 2015 ‘was proving to be the most challenging year yet for supermarkets’, insisted Asda’s five-year strategy would safeguard the retailer in the long term.
He said: “This is the worst number in my memory, but we won’t buy short term sales at the expense of long term profitability and I’m convinced the structural changes we have implemented will hold Asda in good stead.”
One area in which Asda appears to be falling short is on consumer quality perception.
Over the last 60 days, its quality score has significantly fallen by 22.6 percentage points to a score of -12.8, according to YouGov BrandIndex. In terms of quality rankings, Asda now stands 20th out of the 26 biggest UK grocers and way behind close rivals such as Tesco (with a score of 11.5) and Morrisons (with a score of 19.9).
However, Clarke insisted today that product quality wasn’t an issue.
Speaking to Marketing Week, he said: “We have won countless awards for our wine and food recently, so no I don’t agree that there is an issue with product quality. I think that the investments we continue to make in price, quality and service are winning through.”
Fighting the discounters
Clarke insisted that every single store in Asda’s estate remained profitable and, pointing to its 94% increase in new click and collect sites in Q1, insisted that Asda was finding new ways to drive interest in its “more problematic” bigger stores.
Last month, Tesco boss Dave Lewis claimed that bigger stores were seeing a resurgence of consumers returning from the discounters to do their one stop shop. But Clarke believes the growth of Aldi and Lidl won’t slow anytime soon.
“Dave has put out a unique point of view there and he is maybe following the trend that has happened in some of the European markets as I know Carrefour’s resurgence has been due to discounter customers coming back to larger stores,” he said.
“If that is a trend coming to the UK, we will all be smiling, but I think the discounters in this market still have a lot of room to grow. The key for Asda is to make sure our larger stores are the most appealing on a number of different fronts so we can continue to convert primary and secondary customers over.”
Asda’s chief financial officer Alex Russo added: “Britain is still an affluent society so there’s still a large opportunity for larger supermarket formats. People say large stores are a thing of the past, we don’t subscribe to that.”