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Will Asda become the sum of its parts?

A New Year and with it new hope for Asda, which for the last three years has been wallowing in declining sales, lost leadership and a Canute like approach to the threat of the discounters.

If Asda was a ship it is one that is limping back to port having been torpedoed by smaller and more agile competition.

Sources suggest that decision making in Asda House is more laborious than ever. There are too few people driving from a point of experienced knowledge, leaving Asda’s talent pool in need of replenishment. Can the two recent heavy weight hires bring more than hope to the table?

Roger Burnley is thought by many to be a potential CEO in the making and a wise and pragmatic man to boot. His arrival cannot come soon enough after a year-long gardening leave due to end this autumn. Andy Murray arrived in February to take the helm of the Asda marketing team and with a pedigree including Saatchi and Saatchi, is expected to have a significant impact.

Clarke has been the longest serving CEO of the big four and has overseen the biggest drop in Asda Walmart’s sales history.

Clarke at least seems confident that he is not going anywhere and will be judged to be either tenacious or deluded.

Yet must be given credit for taking some bold decisions and retaining the profit through cost control and wise capital expenditure. That said, we sense that margin is not enough for Walmart which will be wanting more and expect that change will be being discussed in Bentonville.

If you focus on price as your differentiator and Aldi and Lidl come along and undermine that message, then you have two choices: regain that price difference (impossible for any of the big 4) or you diversify and offer more than just price.

In truth Asda does offer a lot more than price, it’s just it hasn’t shouted about it in the media or in store.

With sound store positions and a broad offer (if unexciting and too low end), Asda has the ability to bounce back. But a blinkered price strategy won’t be the answer.

Asda customers driven solely by price were always going to be the most promiscuous; their loyalty the most wanting of the Big 4 grocers. Perhaps new marketing campaigns will focus more on a re-invigorated overall offer at Asda, emphasising its points of difference.

Asda has a great clothing brand albeit somewhat too disposable for many, it has a broad range of non-foods at great price points, and it has some great sites, still some of the busiest grocery retail spaces in the UK.

Asda has plenty to work with, yet it has much to do to re-emerge as the sum of its parts.

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