Asda is putting pressure on its suppliers such as Nestlé, Heinz and General Mills to cut prices as it seeks to win back shoppers.
The grocery giant is involved in negotiations with some of its biggest partners as they push back against pressure for aggressive cuts, The Telegraph reported.
The retailer is urging its suppliers to “share the load” amid its price war, which is designed to improve its falling sales.
Meetings are due to be held during the coming weeks in a bid to broker agreements with its hold-outs.
It comes after Asda brought back Darren Blackhurst as its chief commercial officer for food in June to lead the talks. Blackhurst is in charge of rallying suppliers who have not conceded so far, with his approach described by former staff members as “the art of war”.
A source for Asda said: “A lot of suppliers have been supportive. Others are more reluctant. It is about sharing the load. Some just haven’t broken out of the four-week [temporary discount] promotion cycle.”
By increasing pressure on its suppliers, Asda is aiming to strengthen its price war against its competitors such as Sainsbury’s and Tesco.
Related Story
An industry source said: “The idea behind ‘rollback’ is that you get the volume moving first, and then you get suppliers to invest further.
“But what’s happened is that Asda has invested in rollback, and the volumes haven’t come through. The suppliers are holding back investment because they aren’t getting the guaranteed volumes they will need.”
They added: “There has to be something in it for them. If they are putting their money into Tesco and Sainsbury’s, then they are getting a return. If they are putting their money into Asda, then there is no guaranteed return. It is high risk.”
It comes as Asda has relaunched its iconic slogan “That’s Asda Price” in its latest advertising campaign.
The new creative, developed by agency Lucky Generals in its first campaign since winning the retailer‘s account, builds on the momentum of its earlier Rollback to Asda Price push, which saw more than 10,000 products reduced to a new low price.
Click here to sign up to Retail Gazette‘s free daily email newsletter
