The Asda Price Guarantee (APG) is a grocery market “game changer” and is encouraging an increasing number of consumers to shop at the Walmart-owned supermarket, according to the grocer’s CEO and President Andy Clarke.
Britain’s second largest food retailer this afternoon reported a 0.6 per cent year-on-year increase in like-for-like (LFL) trading for 2010, and Clarke is confident that his company’s value for money offer is driving customers to its stores.
A new guarantee was launched in January, promising a ten per cent price gap over Asda’s competitors and allowing shoppers to compare the cost of goods online, but it followed its previous marketing campaign which came under scrutiny from the Advertising Standards Agency (ASA).
Complaints from rival grocers Morrisons and Tesco prompted an ASA investigation, which resulted in a number of APG-themed TV and newspaper campaigns being banned due to their “misleading” nature.
Reflecting on the impact of Asda’s price pledge at a results briefing in central London today, Clarke said: “The price guarantee has got our competitors ruffled.
“Everyone should run their own businesses and I would not have spent millions advertising somebody else’s campaign.”
The CEO also explained that 800,000 people have visited the price guarantee website since January, while today’s figures indicate that almost 170,000 people have downloaded the related iPhone app.
Other data from today’s results shows that LFL sales in the fourth quarter of 2010, excluding petrol, grew by 1.6 per cent year-on-year, prompting Asda to say it had outperformed the market on a LFL basis in the second half of the year.
Internet sales growth has been a significant driver of sales, with the retailer revealing that online trading was up 30 per cent compared to 2009 and had exceeded £500 million by the midway point of the year.
Meanwhile, Clarke said he is keen to utilise Asda’s relationship with US-based parent company Walmart to provide a service to British consumers, and the grocer chose today to reveal details of a new range.
“A jointly sourced homeware brand called Elegant Living will be launched in the spring, which underpins the way we are leveraging our relationship with Walmart to serve UK customers,” Clarke explained.
He added that there will be more ranges launched in conjunction with the US business in the months ahead.
Elegant Living is designed to help Asda in its quest to become the number one retailer in non-food, while the target of becoming a world-class dotcom business appears to be on track. However, the third pillar in the company’s most-recent business plan, to become a clear number two in UK food, is now under threat from rapidly-growing Sainsbury’s.
Clarke commented: “I’m still very committed to the three areas of our strategic plan and believe it is achievable.
“We have opened less space than some of our competitors so on that basis there is a challenge to maintain our number two position in food.
“Last year’s growth, however, has shown we have outperformed the market. The acquisition of Netto will become an important fabric in underlining our position as the second largest food retailer.”