Asda’s CEO claimed this week that its converted Netto stores had begun to recoup the £778m splashed out by Walmart with sales at the stores up by almost half since the rollout began.
Andy Clarke told the IGD Convention that sales were 45% higher than they had been under Netto and that Asda had successfully filled a gap in the market.
The sales figure he gave related to the first 120 conversions, with all 140-plus stores due to open by next month.
Netto’s conversion proved successful strategies did not have to be about new technology, Clarke told the conference, the theme of which was how to innovate despite the economic storm.
“So often we hear the word ‘innovation’ these days and we instinctively think about technology,” he said. “But given the economic conditions, we must also think about today. The Netto performance is the result of fantastic innovation.”
The £100m Asda had pumped into revamping its own-label products had also paid off, Clarke said, claiming it was the fastest-growing own-label brand and ahead of Sainsbury’s for the first time. Asda’s own-label Chosen by You range now accounted for 40% of the retailer’s food sales, he added.
However, Clarke revealed Asda had taken a major sales hit because it had opted to take a lead in removing front-of-store alcohol promotions under the government’s Responsibility Deal. He also accused Asda’s rivals of failing to stick to their pledges.
“We’ve led the way in turning words into action,” he said. “There have been no alcohol promotions in our store foyers since April and because others have yet to do what they say they will act responsibly there have been bottom-line consequences.”
Asda sales grew by 3.6% during 2010 to £20.55bn, according to results filed at Companies House last week. However, the retailer’s operating profits were down by 10.4% to £803.5m for the year to 31 December 2010.