Asda has always been evangelical about its prices. Now, even its advertising is holier than thou. In a new national campaign, out on Wednesday this week, an ethereal-looking shopper picks up a shopping basket and walks into a store as a choir of heavenly angels sings an excerpt from Les Misérables.

“She grabs a basket, knowing shopping’s changed,” says the narrator in a deep voice that sounds almost godly. “Because, for the first time, if it could have cost her less elsewhere, we’ll give her the difference off her next shop.”

The campaign is not only a radical departure from the old Dad’s Army ads and the Asda Price bum-tapping. As the narrator says, Asda is marking a line in the sand, with a new web-based price guarantee service that, in the words of CEO Andy Bond, will put an end to the “phoney price wars that most shoppers are sick of”.

A promise to refund shoppers the difference if they can get their shopping cheaper from Asda’s three main rivals meant “Asda will not and cannot be beaten on price”, he thundered.

Rivals have been quick to dismiss the new online price comparison module, which enables shoppers to check the equivalent price on 13,000 identically matched items from 9am the morning after they have shopped, with the promise of a refund on the difference plus a penny  if a basket of more than eight comparable goods turns out cheaper.

“Andy Bond called promotions weapons of mass distraction but, on the day new trade figures show Asda food sales tanking, this gimmick is the Mother of all Distractions,” said one rival.

But, to be fair to Bond, he’s made no secret of Asda’s recent problems. “We’re having a little bit of a tough time right now,” he told analysts last month. And he promised, at the time, “some fantastic, genuinely step-change initiatives this year”.

Step change number one is clearly the Asda Price Guarantee. And it’s already met with some approval from senior figures within some of the UK’s biggest fmcg giants. One MD told The Grocer: “Every day price is where they’ve historically excelled: day-in, day-out value. It goes back to their heritage and what they’re best at.”

And a senior sales director added: “Wow. That’s some challenge it’s laid down to rivals. Tesco surely can’t allow itself to be knowingly undersold. I can’t wait to see what Tesco does in response.”

It’s not just about price
Others are more sceptical. “The only lever Asda seems able to pull is this one about price and I don’t think, long term, that’s a winning strategy. You need something more in the mix. If it’s ultimately all about price, then Aldi would be the UK’s biggest retailer,” said one Asda supplier. “The retailers enjoying the highest levels of growth, like Morrisons, are not just about price, they seem to be making a big thing about provenance and quality.”

Another supplier added: “People with slightly more disposable income are put off by the price message. Typically Asda are offering good products and good value, and they should be pushing that fact. Just by concentrating on price, people think it’s cheap and they associate cheap with lower quality.”

“It’s a really nice reinforcement if it underlines its existing value proposition for existing customers. Whether it attracts new customers or not is a question mark,” adds another.

But, as Bond hinted in April, this is just the first of a series of aces up the sleeve for Asda. And, in an exclusive interview with The Grocer, chief marketing officer Rick Bendel promised that ideas “every bit as radical and as innovative” as the Price Guarantee website will transform Asda’s quality, service, availability and “eventing” in the next few months.

The five-point plan aims not only to recover the ground lost in the past six months (with growth of just 2.5%, its market share has fallen from 17% to 16.9% according to the latest 12-week figures from Kantar to 18 April), but to take Asda to “a whole new level”, he promised, involving a “price-plus” model.

“With our price guarantee, we’ve got the whole price issue out of the way. Until now, we’ve been constantly defending ourselves against all this noise from ‘Real Baskets’ and hi-lo promotion strategies that, basically, put the con in consumer. Now, we will be able to move on and create the difference in the areas where it matters.”

Bendel promises that promotions will focus on saving money immediately, with multibuys used only to encourage incremental consumption. “There’s no point boosting volumes of shampoo if it means a customer doesn’t buy shampoo for another three months.”

Bendel even promises to bring back some of the fun that’s been lost since the departure of Allan Leighton. But, he adds, the opportunity open to the next CEO will be to interpret this “in a more empathetic way, a less brash way, for the 21st century”. 

How Asda’s Price Guarantee works
1) The customer shops at Asda as normal.
2) At 9am the following morning, the customer logs into www.asdapriceguarantee.co.uk, entering the time and place of the shop.
3) The website, managed by mysupermarket.co.uk, pulls up the receipt and compares the price of the total basket against identical or equivalent products from its three main rivals.
4) Pricing data is updated from Tesco and Sainsbury’s websites daily, while a field team gathers information on Morrisons’ prices twice a week.
5) If a basket of at least eight comparable items would have been cheaper at one of its big four rivals, the site issues an e-voucher for the difference plus a penny to be redeemed, within the next 28 days, at Asda.
6) 13,000 products, or 70% of Asda’s range, can be compared, including branded and own-label items. Asda could not compare 10% of unique lines and a further 20% due to Trading Standards rules.
7) In the case of rival bogofs, the item’s price is halved in the itemised comparison, but cross-category deals cannot be included.

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