Asda president Andy Bond spells out his agenda to Julian Hunt
Andy Bond is in bullish mood. With sales and market share slipping in recent months, an apparent shift in promotional strategy now under way and difficulties finding new space, you can see why critics believe Asda is a business in crisis. But the retailer’s new president will have none of it.
“Our business has slowed down,” he admits, “But the first thing to recognise is that that’s off the back of five years of tremendous growth. This is a fantastic business that is still performing well.”
Sure, it would be great to have twice the space, says Bond, who refuses to be drawn on any of the rumours of possible deals for Littlewoods or Somerfield. Nevertheless, he insists that talk of capacity constraints is overplayed and believes Asda can improve its like-for-like performance within its existing estate - which, in any case, has been bolstered by its acquisition of 12 Safeway stores in Northern Ireland.
And as consumer unease continues to impact on the economy, Bond is adamant that Asda is better placed than many to prosper in a tougher retail environment.
“That climate provides us with a great platform on which to move forwards - because people are going to be looking for unbelievable value,” he says. “There will be lots of uncertainty over the next six to 12 months. That’s the basis on which I will be planning our business.”
So what’s his plan? Bond has introduced a very simple growth strategy that he has dubbed ‘Simply Asda’. It has four strands - simply better value; simply different; simply lower cost; simply do it.
Bond says: “Our mantra of simplification is important in a period of economic unease because those who are creating complexity in their business model will fail.”
Speaking on the day that The Grocer revealed Asda had retained its crown as Britain’s cheapest supermarket, Bond says the retailer will keep up the pressure on price: “The brand is built on offering low prices. There will be no deviation from that.”
He also believes there has been spurious talk about Asda ditching EDLP in favour of a more promotionally driven pricing strategy, saying it has merely been strengthening its existing EDLP+ strategy. “We will always be EDLP,”he says, “But we will do more promotional activity with the aim of being the consumers’ champion.”
However, Bond accepts that Asda has to offer more than just low prices if it is to grow its top line. He says differentiation will be key, adding: “George and general merchandise give us a tremendous point of difference so there will be no let up in our aggressive growth plans for these areas.”
He is keen to find other ways of standing apart from the retail crowd and believes recapturing some of Asda’s in-store sparkle could be one way forward. Store staff will be encouraged to engage with customers so that they can wow them with great service. At the same time, there will be a renewed focus on creating fun events in stores - such as an aftershave amnesty for Father’s Day.
Cost is another issue topping Bond’s agenda: “We can’t be the lowest-price retailer if we do not have the lowest costs. So we have to significantly drive down the cost base. This is not as blunt as redundancies, but about empowering all our colleagues to remove all waste.”
He wants to see significant savings but is short on detail - aside from talking about a daft-sounding initiative with a serious purpose. Bondy’s Bonus Builder rewards staff who come up with ideas that will save Asda £1m or more.
The ideas are already coming in: one is offering a discount at the till for dented food cans (which cuts down on waste and raises customer service); another is changing the way clothing is wrapped when going through the distribution chain (which currently costs £15m).
Running in tandem with this work are efforts to create a culture where staff feel empowered to take decisions and action - rather than passing the buck up the line. “We have to prevent ourselves becoming bureaucratic,” explains Bond. “When times are tough, it’s particularly important to focus your team on doing things extra well.”
He adds: “None of this is rocket science. The real test is whether we can do it better than our rivals. And I am confident that we can.”
Andy Bond is in bullish mood. With sales and market share slipping in recent months, an apparent shift in promotional strategy now under way and difficulties finding new space, you can see why critics believe Asda is a business in crisis. But the retailer’s new president will have none of it.
“Our business has slowed down,” he admits, “But the first thing to recognise is that that’s off the back of five years of tremendous growth. This is a fantastic business that is still performing well.”
Sure, it would be great to have twice the space, says Bond, who refuses to be drawn on any of the rumours of possible deals for Littlewoods or Somerfield. Nevertheless, he insists that talk of capacity constraints is overplayed and believes Asda can improve its like-for-like performance within its existing estate - which, in any case, has been bolstered by its acquisition of 12 Safeway stores in Northern Ireland.
And as consumer unease continues to impact on the economy, Bond is adamant that Asda is better placed than many to prosper in a tougher retail environment.
“That climate provides us with a great platform on which to move forwards - because people are going to be looking for unbelievable value,” he says. “There will be lots of uncertainty over the next six to 12 months. That’s the basis on which I will be planning our business.”
So what’s his plan? Bond has introduced a very simple growth strategy that he has dubbed ‘Simply Asda’. It has four strands - simply better value; simply different; simply lower cost; simply do it.
Bond says: “Our mantra of simplification is important in a period of economic unease because those who are creating complexity in their business model will fail.”
Speaking on the day that The Grocer revealed Asda had retained its crown as Britain’s cheapest supermarket, Bond says the retailer will keep up the pressure on price: “The brand is built on offering low prices. There will be no deviation from that.”
He also believes there has been spurious talk about Asda ditching EDLP in favour of a more promotionally driven pricing strategy, saying it has merely been strengthening its existing EDLP+ strategy. “We will always be EDLP,”he says, “But we will do more promotional activity with the aim of being the consumers’ champion.”
However, Bond accepts that Asda has to offer more than just low prices if it is to grow its top line. He says differentiation will be key, adding: “George and general merchandise give us a tremendous point of difference so there will be no let up in our aggressive growth plans for these areas.”
He is keen to find other ways of standing apart from the retail crowd and believes recapturing some of Asda’s in-store sparkle could be one way forward. Store staff will be encouraged to engage with customers so that they can wow them with great service. At the same time, there will be a renewed focus on creating fun events in stores - such as an aftershave amnesty for Father’s Day.
Cost is another issue topping Bond’s agenda: “We can’t be the lowest-price retailer if we do not have the lowest costs. So we have to significantly drive down the cost base. This is not as blunt as redundancies, but about empowering all our colleagues to remove all waste.”
He wants to see significant savings but is short on detail - aside from talking about a daft-sounding initiative with a serious purpose. Bondy’s Bonus Builder rewards staff who come up with ideas that will save Asda £1m or more.
The ideas are already coming in: one is offering a discount at the till for dented food cans (which cuts down on waste and raises customer service); another is changing the way clothing is wrapped when going through the distribution chain (which currently costs £15m).
Running in tandem with this work are efforts to create a culture where staff feel empowered to take decisions and action - rather than passing the buck up the line. “We have to prevent ourselves becoming bureaucratic,” explains Bond. “When times are tough, it’s particularly important to focus your team on doing things extra well.”
He adds: “None of this is rocket science. The real test is whether we can do it better than our rivals. And I am confident that we can.”
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