Asda - trying to be more than just price.
19 June 2014
In categories like Meat for example; major strides have been made by the business. Highlighting the 'Butchers Choice' range and developing a core range of meat for all tastes as they enhance their overall proposition.
Fresh is a key battleground, and its fair to say there was a negative impression of the own label in the past. Less so now, as lower prices don't automatically mean you have to sacrifice quality.
The meat joint in the image above is notable as it's an example of Asda taking on Aldi, who directly compete via their range of pre priced steak and beef joints.
Aldi sell their Steak at around 10oz (Rump) but fix the price at £3.65 (I believe is their latest price). This allows customers a level of standardisation within their budget, not affected by volatility as the customers know the price they pay.
Asda have reacted with a priced joint (not variable depending on weight) at £5.75, helping customers budget effectively. We know Meat can be priced 'catchweight' which means prices vary based upon the weight of the joint.
Pricing by kilogram for Meat isn't necessarily always popular with customers, especially as they favour a set price, low variation model from Aldi (and to an extent, Asda).
Of course, Asda still remain incredibly strong on price but also on deal. An example within Meat is the core OL Bacon range which is on a permanent 2 for £4 deal, with Smoked / Unsmoked included.
The strength of the deal is accentuated by merchandising, with a full bay flagging the promotion to the customer. Whilst they are the cheapest, it's also notable how they flag value so boldly.
Deal strength has been a key component of the recent Asda growth, with Pepsi reduced to 97p as opposed to the usual £1, sure it's a 3p difference but it gets into the customer's mind that Asda are cutting prices further.
Another example of investing into the deal is evident on Mr Kipling's - typically these are reduced down to £1 / 99p on offer. Asda are going a step further and going down to 89p, enhancing the deal, particularly versus retailers who have similar promotions active.
The manufacturers special pack of Ginger Cake is another example of driving value, giving the customer more for their money.
The own goals from Asda have decreased significantly, top stocking is credited but I believe a greater focus on inventory management, with a better level of stock within the business have helped drive sales.
Promotions were an achilles heel, with big deals selling out constantly. However, store visits (over the last year) have shown that Asda are holding up well with their promotional availability.
Examples like the above are very much the exception, rather than the rule (the opposite was true in the past).
The new marketing PoS is detailed below, representing a bit of a step change in how the business communicates to the customers.
Part of the new VCCP Blue work (presumably) is this new advertising package in store, with a focus on Fresh departments featuring 'points of difference'.
Some are relatively basic - 'Straight from the Vineyard' on Wines, 'freshly baked' (Bakery) or 'handpicked goodness' on Produce. The use of Black and large product imagery works well, highlighting the food without losing the value perception.
The PoS style is similar to that utilised by Tesco in Bishops Stortford as an example, containing statements that are customer friendly and bring a little bit of life to the category.
Highlighting choice, freshness and utilising product imagery across the category works really well, accentuating the 'fresh feel'.
Price lock is advertised with a heavy use of product imagery, it 'feels' right within the new PoS look and feel, highlighting price without detracting from the quality / fresh message.
Whilst Asda are unrivalled on price within the industry, to see them trialling new PoS packages across the stores is an encouraging sign, particularly with their concept stores to launch later this year.
Asda were renowned for quality when I was younger, certainly within the 90's. The moves to enhance their own label and innovate within can only help their proposition.
From the Grocery Insight newsletter archive, first sent to subscribers on 19 June 2014. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.