Asda | Verdict Company Briefing

Asda is the second largest grocer in the UK, albeit less than half the size of market leader Tesco. While the grocer is best known for its larger out-of-town stores, its acquisition of Netto in 2010 took it into a smaller format. Part of the Walmart group, Asda has a strong non-food offer in addition to its core grocery proposition. EDLP and the Asda Price Guarantee are central to its positioning.

• Plan your expansion strategy by understanding how and where Asda has increased its store portfolio, and the impact this has had on densities
• Benchmark your performance in food & grocery with detailed key performance indicators across sales and space data for Asda
• Justify and inform development of private label ranges in clothing by uncovering Asda's activity in this area and the impact on sales.
• Compare your allocation of clothing retail space with Asda by uncovering Verdict's data on the space dedicated to over 30 product categories.
• Benchmark Asda's performance in clothing by using Verdict's proprietary sales data for womenswear, menswear, childrenswear, footwear and accessories.

Asda has not altered its 10% cheaper price promise since the movement of competitors to match on price. This indicates that Asda is confident that its competitors are not matching, despite their claims. This steadfast stance on price positioning has resonated well with Asda's shoppers and loyalty to the retailer has increased year-on-year.

Morrisons pointed to the impact of newly converted Netto stores as hitting its sales hard in its 2012 half year update. In the north of England the secondary locations of Netto stores has brought Asda to its competitor's doorstep in 100 locations. This represents a significant opportunity for Asda to gain share and steal shoppers from Morrisons.

Asda's recent investment in its clothing proposition is sensible given that clothing is one of the most resilient non-food sectors. The relaunch of the website will drive traffic to the site, while the trends page showcases George’s fashion knowledge and expertise which will encourage consumers to spend.

• How will Asda's food & grocery sales grow in 2013, and what impact will this have on market share
• What are Asda's plans for expansion over the coming years, and how will this contribute to sales growth
• How has the conversion of Netto stores impacted the overall retail proposition at Asda
• What is Asda's share of the womenswear, menswear, childrenswear, accessories and footwear markets? What is its share of the UK value clothing market?
• What are Asda's goals around own brand development in clothing and how has it changed its supply chain to become more responsive to customer demand?

Table of contents

OVERVIEW
Introduction
Summary
Focus on food in downturn set to raise market share in 2013;
Stands firm on EDLP as competitors launch muddying matching campaigns;
Convincing on quality not easy;
Yet to make c-store move;
Meanwhile loses share in other sectors addressed by grocers ...
… but online will drive non-food growth;
Could address male target market for electronics via ;
Increases focus on clothing to strengthen its offer;
Extension of click & collect provides growth opportunities.

ASDA
Verdict outlook
Recent key events
New marketing manager
Richard Mayfield steps in as CFO
Stands firm on EDLP as competitors launch matching campaigns
Integrates former Nettos
Proposition & customer penetration
Financials
Former Netto stores inject growth
Space
Netto stores provide space growth but at the expense of space productivity
Food & grocery
Verdict outlook
Recent key events
Customer penetration
Sector performance
Sales mix
Market shares
Space allocation
Clothing & footwear
Verdict outlook
Recent key events
Customer penetration
Sector performance
Market shares
Space allocation
Electricals
Verdict outlook
Recent key events
Customer profile
Sector performance
Market share

METHODOLOGY
Verdict company briefing
Financial information
Market size calculation
Sales density calculation
Further reading
Ask the analyst
Disclaimer

TABLES
Table: Asda company information 2012
Table: Asda retail proposition 2012
Table: Asda UK key operating statistics 2008–13e
Table: Asda UK store portfolio 2003–13e
Table: Asda estimated sales mix 2012
Table: Asda food & grocery and non-food space allocation 2010-12
Table: Asda food & grocery and non-food space allocation 2010-12
Table: Asda UK clothing & footwear sector sales (ex VAT) 2007e–12e
Table: Asda UK clothing & footwear sector growth rates 2007e–12e
Table: Asda clothing and footwear market share breakdowns 2007e–12e
Table: Asda clothing & footwear space allocation 2011

FIGURES
Figure: Asda fascia 2012
Figure: Asda UK sales and growth 2008–13e
Figure: Asda quality perception vs market average 2008 – 12 (%)
Figure: Loyalty 2008–12
Figure: Bradford Asda (former Netto) store proximity to Morrisons supermarket 2012
Figure: Asda click & collect 2012
Figure: Asda free delivery offer summer 2012
Figure: Asda QuickShop 2012
Figure: Asda visitor share for food & grocery 2008–12
Figure: Asda visitor share for food & grocery by demographic group 2012
Figure: Asda food & grocery sales (incl VAT) in calendar years 2008-13e
Figure: Asda food & grocery sales per sq ft for calendar years incl VAT 2008e–13e
Figure: Asda share of market in food & grocery products 2008–13e
Figure: Asda share of total market held by food & grocery retailers 2008 to 2013e
Figure: Asda food & grocery and non-food space allocation changes 2010–12
Figure: Asda food & grocery and non-food space allocation percentage point change 2010-12
Figure: George at Asda pop-up shop June 2012
Figure: Zip knitted gilet from Rory Longdon's knitwear collection for George, December 2011
Figure: George at Asda website June 2012
Figure: Trends webpage on George at Asda website December 2011
Figure: Asda visitor share for clothing 2008–12
Figure: Asda visitor share for clothing by demographic group 2012
Figure: Asda visitor share for footwear 2008–12
Figure: Asda visitor share for footwear by demographic group 2012
Figure: Asda clothing & footwear sales mix 2012e
Figure: Asda clothing sales (ex VAT) to December 2007e–12e
Figure: Asda footwear sales (ex VAT) to December 2007e–12e
Figure: Asda clothing sales per sq ft (ex VAT) to December 2007e–12e
Figure: Asda footwear sales per sq ft (ex VAT) to December 2007e–12e
Figure: Asda mens, womenswear, accessories, clothing and footwear market shares 2007–12
Figure: Asda childrenswear and value clothing market shares 2007–12e
Figure: Asda clothing space breakdown 2011
Figure: Asda footwear space breakdown 2011
Figure: Asda visitor share for electricals 2008–12
Figure: Asda visitor share for electricals by demographic group 2012
Figure: Asda electricals sales (ex VAT) to December 2007e–12e
Figure: Asda electricals sales (ex VAT) per sq ft to December 2007e–12e
Figure: Asda UK sales growth and UK electricals sales growth (ex VAT) 2007e–12e
Figure: Asda electricals market share 2007-12e

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