Asda boss Andy Bond has reinforced his commitment to aggressive price cutting and rubbished suggestions that his sales-led recovery programme is being driven at the expense of profits.
In an exclusive interview with The Grocer ahead of this week's trading update, the Asda president and chief executive warned of more cuts following the campaign on iconic products.
He said: "Lowering prices is part of our DNA. But, while we will drive a hard bargain on behalf of our customers, we will achieve this in the right way, treating our suppliers fairly."
He insisted the sales-led recovery programme was working, pointing out that Asda had beaten its sales plan and only "slightly missed" its profit target. "The reality is that our performance is much better. Our market share is growing," he said.
Asda's nascent recovery was being built on a stronger base than that of its rivals, he added. "The
operating margins of Sainsbury's and Morrisons have been diluted significantly. They've invested in their customer offer and that just raises the bar for everyone. But let's not get out of perspective how well Asda has done and continues to do. I said the recovery plan would take 18 months to two years. A year in, I feel confident. I think by early next year we will have achieved what we want: Asda back to being a key growth business. It was in decline 18 months ago. All the numbers suggest we're growing again."
While it had been a "tough year", head office morale had improved significantly, he said, highlighting an independent survey showing a rise in the percentage of staff describing morale as 'good' from just over 80% to the high 80s since last year.
He also flagged up Asda's work on environmental and ethical fronts, but admitted - ahead of his call this week for the industry to support a common sustainability agenda - that it had not been as vocal as it might.
"Well before Wal-Mart stated its bold ambition, we were proactive and committed to being a leader. Our attitude is that we'd sooner be quiet and get on with it," Bond said.
Asda would continue to focus on improving its fresh, organic and premium offers, and build on the success of its local hubs, he promised, and would continue to push its multi-format strategy. Although he said it was too early to comment on the rollout for Essentials, Bond revealed changes had been made to the original proposition. He refused to be drawn on convenience: "The success of Asda is not predicated on answering that question."
Responding to negative press, he said: "I'm not going to judge myself by how many pluses and minuses I get in media commentary. There's been mixed feedback - while it worries me a bit, I don't have sleepless nights." He added he wanted to be judged on actions rather than words. "I want Asda to be about a culture of substance rather than spin."Bond's gameplan
This week Asda pledged:
To be the 'price aggressor' going forward - it recently cut 2,000 prices
To send no waste to landfill by 2010
That stores will be made from timber frames
To triple its organic range to 1,000 by year-end
To host a sustainability conference with top CEOs