Magazine article Marketing


Magazine article Marketing


Article excerpt

The supermarket appears somewhat vulnerable after a slide in sales and share, writes Joe Thomas.

The UK's second-biggest grocer appears to be in a spot of bother. While its main rivals have maintained their growth, Asda may have lost its way. According to experts, the Wal-Mart-owned supermarket's focus on value could in fact be working against it.

In the three months to 31 March, Asda's like-for-like sales, excluding fuel and VAT, were down 0.3%. Its share of the grocery market in the 12 weeks to 16 May also slipped year on year, down from 16.9% to 16.8% This may seem a small dip, but over the same period, Morrisons grew its share from 11.5% to 11.8%, Sainsbury's was also up and Tesco maintained its share.

Andy Bond, Asda's president and chief executive, stood down in April after five years at the helm, replaced by former store manager Andy Clarke. Rumours sparked by Bond's surprise departure were only compounded by Asda's most recent financial results.

The supermarket has tried to turn up the heat on its rivals. In April, Asda, which shifted its pounds 75m ad account from Fallon to Saatchi & Saatchi at the end of last year, launched a Price Guarantee.

Another possible route to improve its fortunes is the expansion of Asda's smaller stores format, which it hopes to step up having acquired Danish budget retailer Netto's 193 UK stores.

Where now for the retailer? We asked Mel Cruickshank, managing director at LIDA, which handles the Boots Advantage Card, and Dan Shute, former director of engagement and participation at DLKW, which handles the Morrisons ad account.

Diagnosis: Two industry experts on how Asda can tap into consumers' pockets again

MEL CRUICKSHANK, managing director, LIDA

With its new chief executive, election-blogging shopper panel and Price Guarantee, Asda has made its fair share of announcements recently. Yet it's the news that sales are on the slide for the first time since 2006 that has really captured headlines.

Asda has been Britain's second-biggest supermarket for seven years, and it's now the first of the 'big four' to report a dip, with like-for-like Q1 sales down by 0.3%.

Perhaps best known for its pocket-tapping ads, the supermarket has consistently pushed its value credentials, most recently by promoting its Asda Price Guarantee.

However, as the country begins to emerge from recession, the chain has been hit by shoppers trading up from 'everyday low prices' to more expensive goods. While stores like Waitrose profit, Asda is stranded. Its out-of-town locations also make it vulnerable during fierce winters like the last one. …

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