Asda will pump an emergency injection of £30m into stores focusing on having more frequent daytime replenishment, opening more checkouts, and ensuring its stores are clean.
The announcement came today as the struggling supermarket giant gave more details of a major store reset, revealed by The Grocer last week, on the back of a slump in sales.
Announcing its Q2 results today, the supermarket revealed revenue excluding fuel was down 2.2%, with like-for-like sales down 5.3% over the period.
Like-for-like sales for the first half of the year were down by 2.1%. Asda admitted it had been overstretched by competing major strategic priorities, including the expansion of its convenience empire and a major IT project to uncouple Asda’s systems from former parent Walmart.
“From time to time it’s right to stand back and reassess,” chief financial officer Michael Gleeson told The Grocer. He claimed Asda was “listening and responding to customer and colleague concern”.
Asked how Asda had managed to let such basic fundamentals as store cleanliness, checkout queues and availability reach such a bad state, Gleeson said: “It does partly reflect the level and scale of change the company is going through in terms of separation.
“We recognise it’s the right thing to do to put those hours in.”
As well as ongoing issues with availability and store cleanliness, matters which have been reflected in the findings of the Grocer 33 survey, Gleeson admitted Asda customers had become frustrated at the lack of available manned tills.
“When hours have come out of the business it’s been very front-end focused in response to more customers moving from manned to self-checkouts,” he said.
“It’s been a response to change of activity, but it’s the right thing to invest hours at this moment in time.
“What we’re not doing is changing the mix between manned, scan & go and self-checkouts – we will simply be manning more of the already available manned checkouts for longer.
“It’s improving service and reducing queues to use the manned checkouts.
“We will always respond to what customers say and this is an investment to man the checkouts we already have.”
Asda’s promise to refocus its efforts on better availability are also a key part of its turnaround plans, with the supermarket recommitting to its ‘Always Available’ policy on its top 1,000 lines.
However, this week union leaders told The Grocer the £30m invested into extra staffing hours by Asda boss Mohsin Issa was a “drop in the ocean” compared to the investment needed to turn around the performance of the supermarket’s stores.
The GMB told The Grocer it had calculated that at least £50m in cuts had been carried out by January of this year, with more since then, meaning the reset revealed by Issa and his TDR backers last week was insufficient.
As well as improving basic store standards, Asda has identified its loyalty programme as another area for investment in the next half of the year, although Gleeson appeared to rule out any short-term move to follow the likes of Tesco and Sainsbury’s in investing in member-only Prices.
Asda’s loyalty app base grew to more than six million users in the second quarter and now accounts for more than 50% of transactions.
“I think we’ve managed to create a differentiated loyalty scheme in the past two years which is based on shopping missions on individual products,” said Gleeson.
“Clearly Sainsbury’s and Tesco have gone down the line of member pricing. Whether we do that, we will wait and see, but we are very pleased with what we’ve achieved so far. It is unique in the market.”
No comments yet