Asda reports strongest growth of the Big Four in first quarter 2014
– Britain’s second largest retailer has announced LfL sales of 0.1% for the 15 weeks to 20th April 2014
– The retailer continues to deliver on its five year strategy to redefine value retailing in the UK with continued investment in price
– New proposals outlined to realign retail operations and ensure stores are ‘Fit for the Future’ – creating new roles in stores and putting more colleagues on the shop floor
Today – May, 15th 2014 – Asda announced its financial performance for the first quarter of 2014.
In the 15 weeks to 20th April Britain’s second largest supermarket grew sales on a LfL basis at 0.1% (excluding Petrol)*
Speaking at an event in London, Asda’s CEO and President Andy Clarke commented: “In what remains a challenging market I am pleased to see that our strategy is paying dividends. Over 18 months ago we recognised the beginnings of a structural shift in the retail market and by looking at our business and how it needed to change we have been able to get ourselves ahead of the curve and implement a strategy that is delivering real value for our customers and growth for our business.
“We are in the first few months of a five year journey, but I am confident that we are on the right path – and the numbers we are reporting today, as well as recent Kantar and Nielson data – show that we are moving in the right direction and already making gains.
“But we know that we can never be complacent. Our sector is constantly changing, and we have to be prepared to change with it, whilst remaining rooted in our strong heritage of investing in Everyday Low Prices, operating an exceptionally efficient business model and doing the right things for our communities and colleagues.”
At the presentation, Asda CFO Alex Russo discussed highlights from the previous quarter including the continued strength of Asda’s price position against large retailers and a narrowing of the gap to the discounters, as well as double digit growth in Asda’s newly launched George Home range, which brings George’s quality and style credentials to Asda’s general merchandise business. Russo also noted that market share data showed that Asda benefited from the strongest sales in the Big Four over the important Easter period. At a time when families are looking for great quality and value for their family get-togethers, Asda’s market leading offer on key lines such as meat, fish and confectionary drew shoppers to their 579 UK stores. Russo also outlined Asda’s continued leadership in Grocery Home Shopping – reporting further market share growth to 19.2% in this important growth channel.
Newly appointed Chief Operations Officer, Mark Ibbotson, who has been at the centre of Asda’s retail operations for over a decade outlined how the business continues to invest in driving efficiency in its operations and is looking to make £1 billion of efficiency savings over the next five years as part of its strategic objectives. He gave examples of investments large and small in operating activity – including a £7m saving in waste, £26m investment in energy efficient lighting in stores and multi-million savings through ‘tweaks’ to its supply chain management.
Ibbotson also explained that this week stores were being consulted on proposals to update structures that more accurately reflect the roles colleagues are now being asked to do. He explained that “The only constant in retail is change – and whilst people will always be at the heart of our business, the jobs we were asking our colleagues to do five years ago – when we just operated shops and had a small Home Shopping business – are not the jobs they are actually doing today, and not the jobs we need to empower them to do over the next five years if we are to continue to grow and deliver our strategy for growth.”
Ibbotson explained that since Asda outlined its five year strategy in November 2013 the business had been working with stores to look at how different structures could help get more colleagues on to the shop floor and free up time for growth areas such as Home Shopping and ecommerce. A number of options had been tested live in 20 ‘Hot House’ stores of various sizes and formats over the past six months, taking feedback from colleagues to develop a proposed new structure for stores that removes some existing Department Manager roles and creates new Deputy Manager, Trading Manager and Section Manager roles, as well as adding additional Section Leader roles to stores to increase the number of colleagues on the shop floor. The proposals, which are subject to consultation involve around 4100 Managers across Asda’s stores and will create up to 5000 roles – creating a net benefit of around 900 new roles.
Clarke concluded that he was ‘proud of what his colleagues continued to deliver for Asda’s customers as they start to gain some confidence in the beginnings of real economic recovery.’
He said; “The last three months have seen more significant change within the retail sector and macro economy. The economic indicators are looking more positive and consumers are starting to feel the benefits in their daily lives. More and more retailers are waking up to the idea that the market has changed and they need to change with it. I am proud that our business identified these changes early and is now well on the way to delivering a strategy that will see us grow.”