Asda is shifting its marketing focus to speak the standard of its food offering, but insists low prices will still play an enormous role in its marketing mix, news that comes as sales slowed almost to a standstill in its latest quarter.
Asda is shifting its marketing focus to speak the standard of its food offering,
The supermarket says sales from stores open for a year or more grew 0.3 per cent within the 13 weeks to 4 October, its third quarter. Like for like sales had grown 0.7 per cent in its second quarter and 1.3 per cent within the first.
Asda’s share of the supermarket sector dropped 0.4 points to 17.2 per cent, the Wal-Mart owned chain adds.
Asda CEO Andy Clarke said during an event to announce the outcomes that Asda’s investment in low prices impacted growth, nonetheless it may have long-term benefits in boosting customer loyalty. The supermarket is planning to extend its investment in pricing to £1bn over the subsequent five years, up from a planned £600m investment.
It also will invest £250m in “quality, style and design” over the subsequent five years because it attempts to cement its position because the “leading value grocery retailer”, Clarke added.
Up to now, Asda’s advertising has reflected its big emphasis on pricing, with its “Everyday low cost guarantee” forming the bedrock of campaigns. However, chatting with Marketing Week on the same event, marketing director Steve Smith said the supermarket now sees a chance to connect to its customers with a brand new quality message.
“We ought to better showcase our price equation, highlighting not only price but additionally the standard of our products,” he said.
The move comes after Asda switched its ad account from incumbent Saatchi and Saatchi to VCCP Blue earlier this year. Smith said he was so impressed with the firm’s pitch that he got them engaged on all areas of its marketing, including branding and in-store design, within six weeks of winning the account.
That can already be seen in its Christmas advertising campaign, Smith added, which alongside the cost message will even include ads targeting its award-winning wines, bakery and dessert products. He said Asda would also integrate its value equation into the selling message going forward, with plans to focus on quality in “cheeky” ways inside the first quarter of 2014.
The shift in focus comes after Asda undertook a “massive” strategic review to assist it understand the market and shopper activity. Smith said there’s a “sizeable” proportion of customers that don’t have a major grocery shop.
He desires to convert more of them to Asda shoppers but believes the right way to try this is to make sure that the stories behind its products, including factors resembling provenance, comes through. That features a new strapline “You’re at Asda”, which debuted in the course of the Christmas campaign.
Asda’s performance lags Sainsbury’s, which yesterday (13 November) announced a 1.4 per cent increase in first-half sales, but beats Tesco, which posted flat sales for its last quarter and Morrrisons, which reported another decline last week.