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Asda sales growth slows in Q3

Asda is hoping that a raft of multichannel initiatives will drive sales growth during Christmas and next year after reporting a slowdown in sales during the third quarter.

ASDA

The Wal-mart owned supermarket posted 0.3 per cent sales growth during the 13 weeks to 29 September, a decline on the 0.7 per cent growth Asda reported last quarter. It claims, however, that it continues to outpace the market as its market share increased to 17.5 per cent during the period.

President and CEO Andy Clarke told journalists at the results presentation that he was “pleased” with the supermarket’s performance in what remains a “challenging market and tough economy”.

Rival Tesco reported a 0.7 per cent fall in like for like sales for its first half year earlier this month while Morrisons sales fell 2.1 per cent in the three months to 28 October. Sainsbury’s posted a 1.7 per cent rise in like-for-like sales in the six months to 29 September.

Clarke says internal research shows two thirds of shoppers expect 2013 to be more challenging than this year and revealed the improvement in households’ disposable income recorded by its monthly income tracker in September has flattened out again in October.

He adds that Asda’s strategy for growth centres around finding ways to address two major challenged faced by consumers; being time and cash poor.

Judith McKenna, Asda Chief operating officer, said multichannel and mobile is “crucial” to its growth and profitability and outlined Asda’s four-point multichannel strategy alongside the third quarter results.

She revealed that its multichannel business has doubled from a £500m business to around £1bn since 2010.

Asda is trialling a number of ways shoppers can use click and collect services for grocery shopping including plans to open its first standalone grocery click and collect store on a business park, as well as trialling grocery click and collect in petrol station forecourts. It recently launched the first non-food Asda Living store that can also accept click and collect grocery orders.

Speaking to Marketing Week at the presentation McKenna said the supermarket is focussed on choosing the right mobile initiatives for its customers, not just the most exciting things. Possible additions to Asda’s mobile app portfolio are in-store navigation, tools to help find products on a shopping list in-store and whether there are any offers on products on each shopper’s list.

She said: “There’s a whole raft of different things [to do]. What will be really important for us is to chose which things to do when and which do our customers want. Not because we really like them but because customers want to use them. There’s lots of ideas in the pipeline but its which ones we go after.”

McKenna also told journalists that Asda’s approach is not to go for the most “techy” mobile apps with “bells and whistles”, but instead offer “practical” tools for its shoppers.

Asda claims that its Facebook engagement is higher than any of its rivals and while social media offers a commercial opportunity McKenna warned against using every channel to sell directly to customers saying that “the relationship is just as important as sopping.”

Asda’s four point multichannel strategy:

  • One Asda, one customer - enabling customers to seamlessly move between the store and the web.
  • Technology enabling retail - Free Wi-Fi in store, store managers using iPads on shop floor to improve performance.
  • Stores without walls - Click and Collect for George clothing, non-food and grocery.
  • leveraging Wal-mart - scale, talent and Wal-mart Labs e-commerce division in San Francisco to drive innovation.

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