For all the claims to have "won Christmas", LFLs of 1% for 14 weeks to January 7th hardly sound worth shouting about. Even the dates are a bit suss, as Asda usually deliver a strong "Sale" in January driven by George and big deals of vacuum cleaners and dryers.
The press release refers to formats being a key plank of their strategy, but there is a noticeable lack of detail on the Supermarket format's performance. Previously, Andy Clarke has been his usual bullish self claiming 45% increases in turnover. Smaller shops do tend to slow down during the golden quarter, but if the rebranding from Netto was still delivering the goods, surely they'd be shouting about it? Regular followers of my blog know I'm cynical about the viability of the Netto stores and I still stand by this. The presentation of the format is very strong, but the ranging is questionable with none of the guile and subtlety you need to create an operationally viable planogram with the perception of broad choice for the customer. In stores, plans look like they've tried to cram in as much as possible with no analysis involved. Suppliers have also been tapped up for extra cash to get products in - not really customer focused and certainly in line with Andy Clarke's comments today that money should stay with the two most important parts of the supply chain - the producer and the customer!
I'm going to get a bit personal here. I give Asda a hard time because of the people I left behind there. The business is still full of very talented people, despite the brain drain to Wilko and Morrisons over the last couple of years. These people are constrained and held back by a business that won't let go of a culture that came out of the Archie Norman and Allan Leighton years. The problem with corporate cultures is that if the leaders don't live the values, they become not much more than a "cult". Anyone who has sat through 2 days of induction training in the Tomato Room at Asda House will know what brainwashing feels like. Asda culture says that no one has an office. When Andy Clarke was COO, his open-plan desk was next to a meeting room. Which had a sofa in it. Which was permanently booked out to Andy Clarke. When his desk moved, so did the meeting room. Make of that what you will!
Asda needs to trust its people again - my former colleagues tell me that they are hitting targets, yet morale is low. It's hardly surprising - if your target for food is nothing more than holding onto 2nd spot, what have you got to strive for? At Tesco, the philosophy was to assume that someone elsewhere was doing your job better than you. That's what drives them and why they should be admired. Go on Andy - set your people free and actually live those values!
Even if Asda do pick up some downsizing customers, their shops still scream "WE'RE CHEAP! YOU ARE SHOPPING HERE BECAUSE YOU CAN'T AFFORD ANYWHERE ELSE" at you. That may work in the short-term but they will attract shoppers who resent shopping there and will leave in their droves once their consumer confidence returns. The fantastic work on their private label brands means nothing if the store environment is not attractive. Painting the walls maroon instead of white is not the answer!
This is a critical year for Asda. Rick Bendell's comments back in 2009 that "This is Our Time" have yet to come true and his time may be called if things don't start improving. After Rick, Andy Clarke will have run out of directors to sacrifice and his Bentonville paymasters may feel it is time for him to move on. Watch this space