Why isn't Asda doing better?

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Asda isn’t doing badly, but it should be doing better, don’t you think? Perhaps it suffers from its Northern bias. And like other big box retailers, high fuel costs and the internet have hurt. But there are plenty of factors working in Asda’s favour: internet sales are growing (unlike Morrisons) it has a meaningful convenience presence (unlike Morrisons). Above all, like high-flying Aldi (and unlike Morrisons, Tesco, Sainsbury’s, Waitrose, The Co-op etc), Asda is an EDLP retailer. Indeed, its prices are not only closest to Aldi’s, they’re getting closer, while delivering a much fuller offer, on a far larger scale, backed by the mighty Walmart.

It also has, in Barry Williams, a chief merchandising officer with discounting in his bones. A former Kwik Save buyer, he spent a few years in the Musgrave price wilderness, but as our Big Interview shows, he clearly relishes the Asda way. And under his challenging, pragmatic and fun leadership of commercial (a far cry from the former suit), only Asda is keeping price inflation at bay (and conversely, as our Grocer Price Index shows, Tesco and co are dialling back on promotions).

” Why isn’t Asda doing better? Is its functional advertising to blame? We’re about to find out”

Adam Leyland, Editor

So, why isn’t Asda shouting about its pricing? Well, with a £100m ad budget, it can hardly be accused of keeping its mouth shut. But comparisons with Aldi are again unflattering. While Aldi’s ads have delivered an EDLP message in an edgy and disruptive way, Asda’s ads have been mostly functional and failed to achieve cut-through. Even its attempt, last Christmas, to celebrate hard-working mums backfired, as dullards deemed its humorous portrayal sexist.

So, with Asda this week announcing the appointment of a new ad agency, VCCP Blue, expect new straplines, more edginess and advertising that conveys, a little less, Asda’s worthy obsession with EDLP and a little more, the cheeky, quirky personality of Asda itself. And with the new creative not kicking off till January, if I were Saatchi & Saatchi, I would sign off with a pastiche of last year’s Christmas ad, featuring a ‘new dad’ who wraps all the presents, prepares the dinner etc etc - before ‘Asda mum’ wakes up from her Christmas fantasy, and says ‘Yeah, right’ before rolling up her sleeves to peel the spuds.

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