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Invis
Invis
Tuesday 15th May, 2007
A RETURN TO COMMON SENSE RETAILING GETS THE TILLS RINGING AT ASDA

Better stores, broader ranges and lower prices help attract 1.5m more customers

ASDA today (Tuesday 15th May 2007) reported that total sales for the first financial quarter of the year were up in the low double digits, and like-for-like sales have continued to strengthen with mid single digit growth. This is the fourth successive quarter that ASDA's like-for-like sales have accelerated.  

The supermarket attributed its improved performance to a significant increase in the number of customers shopping in its stores*, a broader range of products and a continued focus on lowering prices. Food, general merchandise and George clothing have all seen an improvement in like-for-like sales this quarter. 

Andy Bond, ASDA president and chief executive said: "I'm delighted with these figures as they show our common sense approach to retailing is paying dividends. The combination of lower prices, broader product ranges, cleaner stores, and shorter queues is a simple, but winning formula. It's not rocket science, but it's exactly what people want, that's why we've attracted a million more customers in the last year."  

ASDA has tripled its range of organic food, doubled its premium range (Extra Special) and spent millions improving customer facilities including upgrading its in-store cafes, customer toilets and baby changing rooms.  

Bond added: "There's still plenty more to do, but with interest rates on the rise again people are feeling the pinch, so lowering prices is as important now as it's ever been. That's why we're determined not to follow the crowd by using organic, premium or healthy food as an excuse to inflate margins and rip customers off." 

ASDA also confirmed that its operating income was ahead of plan, and grew faster than sales - reflective of its ongoing cost reduction programme, including initiatives to reduce energy consumption. As part of its commitment to cut carbon emissions ASDA is building energy efficient new stores, the first of which opens in Shaw, Oldham in August 2007. 

The supermarket announced it is also on target to cut food packaging by 25% by the end of 2007, and plans to cut packaging on George clothing and non food ranges within the next 12-18 months by the same amount. It has committed to pass every penny saved back to customers through lower prices.

-Ends-

Notes for Editors

*Since mid-2005, ASDA has attracted around 1.5m new customers.  Half of those customers have come from existing stores, half from new stores opened in that period. 

Three Horizons Model

The acceleration in like for like sales and customer numbers is the result of ASDA's strategy to broaden its appeal through three horizons of better execution, differentiation and development of new channels and new formats.  

The first horizon involved fixing the basics. This has resulted in a 1% point improvement in availability and approximately a 30% reduction in customers needing to queue at the checkout. On pricing, ASDA continues to be the price leader in the UK, as recorded by a number of independent surveys [such as “The Grocer” magazine] and has launched a more aggressive general merchandise and clothing pricing strategy, under the banner of “Why pay more?”.  

The second horizon has focused on differentiation. Food service and George departments are being remodelled, and own label product development continues at pace, particularly in areas of increased consumer interest - such as healthy, organic and premium food ranges.  

A refocused marketing program is reinforcing ASDA's points of difference and building on ASDA's reputation as a 'common sense' retailer. ASDA is leading the way in local sourcing, working with over 3000 local vendors, with 10 award-winning regional food hubs, with another 5 to open this year.  

The final horizon is around future growth platforms. Upgrading the ASDA.com proposition has included the launch of an online furniture and electronics offer, with encouraging results, and the extension of the grocery home shopping service. By the end of this year, every ASDA customer will have access to its online grocery home shopping service.  



 

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