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What next for Asda?

Three priorities for chief executive Sean Clarke

About this article

Sean Clarke’s career at Asda-Walmart spans 15 years. He has held a variety of roles, most recently chief operating officer of Walmart China. He became chief executive of Asda in July 2016.

These are tough times for Asda, with like-for-like sales struggling and competition increasing. Despite these challenges, Asda’s large, mainly young customer base means it remains a critical trading partner for suppliers.

Against this background, our senior retail analyst Chris Kirkland has identified potential areas for Sean and his senior team to focus on. Here, we look in more detail at three of those areas, and the opportunities we see for Asda and its suppliers.

Priority: price investment

Asda is an established price leader. Yet discounters and other multiples are threatening this position, meaning Asda’s commitment to everyday low pricing (EDLP) no longer makes it distinctive.

Opportunities

It goes without saying that continued investment in lowering prices will remain a key means of staying competitive in the current market. Asda’s ‘That’s Better’ campaign, offering cuts of 15% on over 1,000 lines from fresh produce to pasta, is a good recent example of this focus.

Source: IGD Research

Continued price investment will reinforce Asda’s strong identity as a price leader. The challenge, for suppliers and Asda alike, is how to convert customers’ strong perceptions of Asda’s low price position into action. This is particularly important as the consistent nature of EDLP can struggle to create engagement and excitement.

As a supplier, are you thinking about how to help Asda tell a more compelling low price story (one which celebrates the power of brands), particularly around events?

Priority: range rationalisation

Asda sees range detailed as a key way to make stores more relevant and easier to shop. This strategy also creates a leaner cost structure, allowing Asda to reinvest in price and other improvements. The challenge is how to remain distinctive and differentiate from competitors.

Source: IGD Research

Opportunities

Suppliers will need to work more closely with Asda, using more granular assortment analytics to understand the broader implications of range decisions. Suppliers should ensure that range decisions are revisited in regular category reviews, as part of the ongoing process. Also, expect to provide more convincing proof that your product deserves shelf space, to gain new product listings.

Priority: reaching more online shoppers

Asda sees e-commerce as a key way to reach more shoppers. This is especially important in London and the South East where it has fewer stores. Although Asda has slowed the pace of online development, it remains a vital part of strategy.

Opportunities

Asda is working with suppliers to get the basics of online retailing right, from imagery to product descriptions. Can you help Asda create cross-category solutions for specific shopper missions, like breakfast?

 

Source: IGD Research, Asda, Kellogg’s

For more detail on the priorities for Sean Clarke, click here.

Related information on IGD.com

The IGD Asda Trade Briefing 2017

This will be the first opportunity to hear from Sean Clarke and his leadership team about the changes they're making in Asda at the trade briefing in February. They'll share their key priorities for 2017 and beyond and what it means for your business.

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