Bloomberg News

Wal-Mart’s Asda Plans Price, Quality Push After Christmas ‘Win’

February 21, 2012

Feb. 21 (Bloomberg) -- Asda, the U.K. supermarket chain owned by Wal-Mart Stores Inc., said it plans to focus on price transparency and improved food quality as it looks to boost growth in a market reliant on promotions and discounting.

“The economy is still going to be challenging and we need to do everything we can possibly do to maintain the two drivers of price and quality,” Chief Executive Officer Andy Clarke said at a press conference in London today. “Our focus will very clearly be on price leadership and our investment in quality.”

Sales at stores open at least a year rose 1 percent excluding fuel in the 14 weeks ended Jan. 7, Asda said today, slower than the third quarter’s 1.3 percent growth. The grocer maintained that pace in January, Finance Director Rob McWilliam said, led by a guarantee to be 10 percent cheaper than competitors, more shoppers buying a basket worth in excess of 40 pounds ($63.18) and a surge in online purchases.

Asda was a “clear winner at Christmas,” Clarke said, with online sales of more than 700 million pounds and a “modest amount” of volume growth. The second-largest U.K. grocer increased its market share to 17.5 percent in the 12 weeks ended Jan. 22 from 16.9 percent in the same period a year earlier, according to researcher Kantar Worldpanel, with the purchase of the Netto discount chain boosting growth.

About 500,000 customers each week are checking their receipts on Asda’s price-guarantee website, McWilliam said. The Leeds, England-based retailer promises to be 10 percent cheaper than competitors or will refund the difference.

Chosen by You

The grocer has cut the price of hundreds of items in its mid-priced own-brand Chosen By You range and set aside 500 million pounds to invest in 25 store openings. Those include superstores of 25,000 to 80,000 square feet, small-format outlets of 3,000 to 25,000 square feet and Asda Living stores, plus three depots and 43 extensions and refurbishments.

Last month, the grocer said it was on track to open overseas pilot stores for its George fashion range as part of an agreement with two franchise partners. Azadea Group of Lebanon will be responsible for outlets in the Middle East, while SandpiperCI will look at stores in Jersey and Guernsey.

--Editors: Paul Jarvis, David Risser

To contact the reporter on this story: Sarah Shannon in London at sshannon4@bloomberg.net.

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net


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