Asda to Invest £1 Billion in Lowering Prices and to Extend UK Reach
Asda has set out three strategic priorities for the next five years to build on its position as the UK’s leading value retailer. The aim will be to improve the core business, extend Asda’s reach and expand the brand into new markets by: significantly lowering prices, further increasing quality and giving more people the opportunity to shop with Asda.
It will achieve this by investing £1 billion in lowering prices and £250 million in quality, style and design over the next five years. Asda also plans to widen customer access from 53% of the UK to 70% through the physical development of stores and the extension of Click and Collect to over 1,000 locations by 2018.
“The market conditions are tough, competition is fierce and our customers’ budgets are under intense pressure,” says Andy Clarke, president and chief executive of Asda. “Looking to the longer term, we recognised some time ago that no matter whether the macro economy is slowly improving, every day finances remain under pressure and our customers have less time. Consequently, they are changing the way they live, budget and shop, to adapt to this new economic reality.”
The £1 billion price investment will enable the retailer to widen its price gap to the ‘big three’, reinforcing its commitment to deliver EDLP (Every Day Low Prices). The investment will also close the price gap to the discounters.
Asda customers today value quality, service and choice almost as much as price. Therefore Asda is making a £250 million investment in product quality, style and design. This will accelerate the huge strides in quality that Asda has already made, including the launch of Chosenby You and Extra Special and its recent awards for meat and fish.
Asda has set its sights on breaking into parts of the UK where its market share is low but where customer demand is high, with a particular emphasis on London and the South East. Plans will include expansion of its successful Supermarket format and growing the number of its standalone petrol filling stations. Innovation in its large stores will also continue including the pilot announced recently which will see eight Barclays bank branches in stores from early 2014.
Asda’s online business remains a core part of its growth strategy, expected to generate £3 billion annual sales by 2018. Click and Collect will also form a significant part of this approach with plans to increase the number of Click and Collect locations from 218 to over 1,000 in the next five years.
The investments will be funded through savings generated by Asda’s continuing ‘We Operate For Less’ programme, as well as through the global leveraging power it has with parent Walmart.
