Arriving owners need to bring inspiration to refresh bland ASDA strategy, says GlobalData

Following today’s release of ASDA Q3 figures for 2020,

Thomas Brereton, Senior Retail Analyst at GlobalData, a leading data and analytics company, comments:

‘‘ASDA’s monotonous Q3 results expose why the supermarket needs incoming new owners Issa brothers and TDR Capital (to be completed in H1 2021) to bring in a fresh view. The 2.7% rise in ex. fuel l-f-l sales and 72% sales increase across and is – relative to likes of Tesco and Sainsbury’s – mediocre.

It is not that ASDA’s results are poor, or even that actions over the last quarter (e.g. unveiling a new sustainability store or removing plastic fruit and veg bags from stores) will be detrimental to future performance. It is more that such trials and initiatives are simply following in line with what other supermarkets are doing (or did a year ago), as if ASDA has cobbled together a strategy based on actions of its rivals, rather than assessing its own position in the market and how best to change to meet consumer demands.

There is hope that, under the new ownersASDA will receive the attention that it needto compete with the wide array of competitors that are moving towards an EDLP strategy and with the expanding discounters. This includes a promise of £1bn investment over the next three years (predominantly in price and supply chain), as well as the possibility of the Issa brothers’ knowledge of convenience retailing enabling ASDA to readjust the model and adapt to convenience-driven shopping missions. In the meantime, ASDA must become more proactive, and ensure that it puts its ‘test and learn’ motto into action quicker.”

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