Asda tills

Clarke’s remit is to get Asda to perform better on the key metrics of service, availability, store layouts, quality and price

“We have a lot of work to do,” were the words today from Walmart president and CEO Doug McMillon, as he pondered a 10th successive period of like-for-like negative sales growth at struggling Asda.

This time there was little scope for misinterpretation among journalists, unlike last year when comments from Walmart International boss David Cheesewright had some analysts suggesting supermarkets should be heading for the bunkers with Asda poised to launch a “nuclear” price assault on its rivals.

Instead, it has been the new team, led by Asda CEO Sean Clarke, which has been in bunker mentality-mode. Since Clarke arrived in July, he has taken the Asda management team into virtual lockdown.

In fairness, as his boss says, Clarke has much on his plate and has rightly focused on trying to get Asda to perform better on the key metrics of service, availability, store layouts, quality and – yes – price.

In fact, the bunker terminology is probably even more unfair when you consider that Clarke and respected former Sainsbury’s boss Roger Burnley are reported to have been putting in the road miles, spending much of their time visiting stores to see what needs to be put right.

Today’s results, as Clarke says, do provide some encouragement that Asda is at least heading in the right direction, though as one source says: “nobody is under any illusion that we have finished the job yet”.

That is something of an understatement given how far Asda had slipped in all of the key areas of performance above.

Wherever Clarke and Burnley meet customers, no doubt they will have been getting a similar message. Asda has been unable to match the discounters on price and has done a much worse job than its big four rivals in persuading them to stay put, at least until recently.

Research today from TCC Global, conducted last year among 1,500 shoppers, shows Asda beats Tesco among shoppers when it comes to being ‘easy to get to’ and on having ‘low everyday prices’ and matches its rival when it comes to having a ‘good selection of prices’.

But when asked if it rewards loyalty, just 7% said yes compared with 43% saying the same for Tesco, 40% for Morrisons and 46% for Sainsbury’s.

Which is why Clarke and his management team are right to put the focus not squarely on price but to take a more multi-faceted approach to getting Asda back on track. And if it’s true that 140,000 shoppers came back to the retailer in the past quarter, he is right to have some cause for optimism.

As revealed by The Grocer today, Clarke has also quietly put to bed his namesake predecessor’s Project Renewal strategy, which had set out to refresh nearly 100 stores and deliver a 10% reduction in range by May.

Instead, the project is understood to have been wrapped up in September, with the new Clarke stressing that Asda has done too much broadcasting of its plans in public – an accusation previously made against former Tesco boss Philip Clarke.

The echoes don’t stop there. When Dave Lewis came in to replace Tesco’s Clarke, he put the brakes on expensive store refurbishments to concentrate on the basics of availability and service. These are two of Asda’s key weaknesses in recent years – and Lewis’ decision looks even more right now, given the economic backdrop of the Brexit era.

The new man at the Asda helm may not, so far, have shown the Midas touch of his rival. However, he is at least showing that while he may have gone to ground, his head is not stuck in it.