In the wake of Asda’s second quarter results, the supermarket outlined three key areas it plans to focus on to improve performance over its second half.
The group saw like-for-like sales decline 5.3% for the quarter ended 30 June, with the supermarket setting out plans to deliver an “enhanced and more consistent in-store experience” for shoppers during its second half.
The grocer’s chief financial officer Michael Gleeson says: “We have made great progress over the last few years in transforming Asda into a diversified retail group, much of which is almost complete.
“However, we also know that there are some areas where we can and need to improve.”
Retail Gazette looks at where Asda is placing its efforts to revive sales and regain market share.
1. Customer satisfaction
Firstly, Asda is investing an extra £30m into staff hours to strengthen its customer proposition.
The retailer hopes the move will improve its replenishment of stock during store opening hours. It also wants to increase the number of workers on checkouts over the weekends, and provide a more effective cleaning programme in stores.
Gleeson explains: “What we’re not doing is changing the mix of manned checkouts, scan and go, and self-checkouts. We’ll simply be manning more of the already available manned checkouts for longer.
“It’s improving service for those who choose to use the manned checkouts.”
2. Enhanced product availability
Asda will also invest in enhancing availability across all of its categories for the remainder of its second half, including across its 1,000 core grocery lines which it said were most important to customers.
The supermarket expects to deliver material efficiencies to make replenishment processes easier and to allow more deliveries to be put straight on shelves.
Gleeson says: “We will increase our focus on and invest in enhancing availability across all categories”
3. A renewed trading plan
Lastly, Asda vowed to deliver a renewed trading plan for the rest of its second half, with a key focus on on driving increased use of its Asda Rewards loyalty app, which just two years after launch, make up 52% of all transactions.
Gleeson says: “We will deliver a renewed trade plan, building in the remainder of half two on the great success of Asda Rewards.
“In its short life, we now achieve more than 50% of our sales on Asda Rewards.”
The loyalty scheme now has more than six million regular users, with participation rising on a quarterly basis.
Is the supermarket taking the right tack to win over shoppers?
GlobalData associate retail director Sofie Willmott says: “Asda is focused on major technology improvements across the board covering customer-facing areas like self-checkouts and scan and go devices, as well as back-end processes within its distribution centres and in its payroll software.
“No doubt this will bring benefits and cost savings in the long term but while it has taken its eye off its core product offer, distracted by these projects as well as buying EG Group and a number of Co-op stores.
“Its competitors have been laser-focused on food at a time when consumers have been extremely budget-conscious and willing to switch.”
She adds: “Asda must focus on ensuring its core food offer is compelling and fight to win back shoppers as a priority over complementary areas that although are important in the long run, are less of a driver than value for money.”
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