It’s no secret Asda has suffered from difficult sales performance in recent years, though recently results have improved. Those of us of a certain age, though, remember the Asda of 10 to 15 years ago, delivering stellar sales performance and creating pressure on the rest of the market, not unlike the pressure the discounters are creating today.
So what can we learn from it? The big theme of Asda at its best is customer focus. Having a deep understanding of its core customers, their needs and aspirations, and then acting decisively.
In the glory years, Asda offered a combination of decent food, industry-leading non-food and low pricing that became very hard to compete with. The epicentre was George clothing - great product, great prices and a challenger mindset that resulted in UK market leadership on volume.
What about now? How do we see this customer focus playing out across the current Asda offer?
There are good examples in fresh food. In prepared vegetables, Asda offers good-quality, family-sized portions at an affordable price. In prepared meat, there’s a smart-looking range of ready-to-cook products for two - not dissimilar to what you’ll find elsewhere. But Asda adds an authoritative selection of flavoured ‘roast in the bag’ whole chicken and family-sized packs of marinated chicken portions. Asda is taking market themes (the trend towards prepared products, the move towards flavoured meats) but adapting for its specific customer (more mouths to feed, an eye on budget).
You can sense the same customer focus in the Christmas offer this year. George is dominated by light-hearted Christmas clothing. There is a huge gifting range, with clear round-pound pricing and a 3 for 2 promotion. And plenty of sharp offers at front of store, including confectionery tins at £4. A good shop to stock up for a family Christmas.
So why the generally sluggish performance? There are lots of explanations - and none of the big four are finding growth easy to find - but one area I’d be thinking about is overload. There is a huge amount clamouring for attention in Asda right now. Side stacks and display units proliferate. There is so much going on that the shopper can’t register it all. The danger is that customers miss some of the good stuff. One of the attractions of Aldi and Lidl is their simple, edited range. One of their strengths is the clarity of their messaging. Maybe Asda can learn something there.
So customer focus - knowing its customers and delivering against those needs - has been key to Asda’s long-term success. Staying true to that focus, while simplifying the offer and messaging, is its best bet as it seeks turnaround in performance.
Jeremy Garlick is a partner of Insight Traction