By Phil Dorrell
The woes of Asda have been well documented by countless newspaper columns and down beat interviews. After 11 consecutive quarters of sales decline the time has come for a response that moves away from what it has always done; after all the definition of madness is doing what you’ve always done and expecting a different result.
Chasing the drifting spend by reducing prices further and continuing to reduce costs is frankly silly, yet the paymasters at Wal-Mart will want costs decreasing ahead of sales. With margin and operating profit apparently declining too, it all adds up to a bit of a pickle. The price perception brought about by the discounters is only going to lead Asda further down the wrong path.
As a store manager, competing against Asda in the 90’s was hard as they had a great non-food range, a burgeoning George range and an increased presence of aspirational food, something that Safeway prided themselves on. Now most of this has been washed away.
Asda’s food range is frankly cheap. It might be cheerful but it lacks excitement and is definitely unable to satisfy Sainsbury or Tesco customers. The George range that started off with Next type quality has been cost engineered down to the sort of product nobody is going to be proud to wear, and certainly not show the label. The non-food range is choker with cheap product and the seasonal aisle smacks of lazy buying trips to China. Where is the ambition? Where is the product to recapture the customers who migrated to Aldi for price and stayed because their quality was better?
I am an ex Asda colleague and want them to be better, but this just makes me, and countless others, frustrated that their myopic focus on price and cost will ultimately turn them into a poor man’s Wal-Mart. Asda need a comprehensive range review in every major category to identify where the quality at a great price product comes in. Opening price points should not be sacrificed but aspirational product needs sourcing to win back a consumer who is feeling a little, but only a little, better off than they did 5 years ago.
The other factor in all of this is regional ranging, and I don’t mean the local lamb or the farm cheese but a more discerning look at the product ranges aligned to the demographic mosaic of the area. If in a wealthy area of Wakefield I cannot buy a real French stick on a Friday then Sainsbury here I come.