Asda is battling to win back shoppers
Asda has announced major changes customers will see on the shelves. The supermarket is slashing more than 4,000 product lines from its shelves in a bid to lure shoppers back with lower prices. The supermarket insists the dramatic shake-up, which gambles on reducing customer choice, forms part of an extensive “simplification” strategy.
The cuts arrive as the chain grapples with declining sales in the run-up to Christmas, with bosses frantically attempting to persuade consumers that rock-bottom prices will entice them back to the checkouts. A fierce price war amongst the major supermarket chains contributed at least in part to declining food price inflation figures released today by the Office for National Statistics.
The data revealed food inflation dropped from 4.9% in October to 4.2% in November. In the most recent indication of difficulties facing the Leeds-headquartered retailer, upwards of 4,000 Stock Keeping Units – spanning everyday essentials to more obscure items – have been removed from Asda’s aisles in recent weeks as part of plans to axe up to 5,000 products or potentially more.
The objective, according to the Grocery Gazette, is to streamline the supply chain and boost sales volumes on essential lines. However, the drastic measures have done little to conceal the magnitude of Asda’s challenges. The latest industry data shows the supermarket endured a 4.3% tumble in sales over the 12 weeks ending in November, making it the sole major grocer experiencing a revenue nosedive heading into the all-important Christmas trading period.
In a throw of the dice to reclaim customers, Asda has consistently relied on aggressive price reductions throughout this year. Earlier this year, the supermarket brought back its iconic “Rollback” initiative – slashing prices on thousands of everyday essentials by up to 25% – and vowed to deliver even deeper discounts on items ranging from fresh produce to household-name brands.
The chain also introduced fresh price cuts across hundreds of product lines during the autumn months, as part of a broader value offensive aimed at cash-strapped households. However, some argue competing supermarkets have either matched or surpassed many of these reductions, making Asda’s moves appear less like a groundbreaking shake-up and more like a scramble to stem declining market share.
Industry experts have reportedly suggested that consumers have made their preferences clear, increasingly turning to the likes of Tesco, Aldi and Lidl in search of better bang for their buck. Only this week, both Aldi and Lidl unveiled promotions for a Christmas turkey dinner serving eight people at just £11.85, relying on a more affordable frozen bird.
As part of what’s been dubbed a “simplification strategy,” Asda chairman Allan Leighton has maintained that trimming thousands of products will streamline the shopping experience and cut down on waste. Yet suppliers and industry watchers have reportedly cautioned this approach carries significant risk: offering shoppers fewer options at precisely the moment when every pound counts most.
An Asda spokesperson commented to say: “One of the key pillars of our formula for growth is to be ranged in a way that is simple for the customer, removes complexity on our shelves and in our supply chain, and drives volume growth in key lines – growing sales for both Asda and our suppliers.”
