Spotlight on Asda as it bids to find focus

ANALYSTS will be looking for indications this week that Asda is sharpening its focus under recently installed chief executive Andy Clarke.

There will be keen interest in second-quarter figures from the UK's second-largest supermarket chain. Asda's figures fell in the first quarter and marked the end of four years of continuous growth.

It has been struggling since the end of last year, while smaller rivals such as Waitrose and Sainsbury's have powered ahead. This has led to a decline in its market share - the latest figures from Kantar Worldpanel for the 12 weeks to 11 July show that Asda accounted for 16.8 per cent of UK grocery spend, against 17 per cent a year earlier.

Experts say Asda's troubles include increasing participation in promotions, which has confused the message to shoppers about its every day low price promise.

"They need to be clear about whether they are EDLP (every day low price) or promotional - they still seem to be stuck in between somewhere," says Nick Bubb, retail analyst with Arden Partners.

Ed Garner, communications director at Kantar Worldpanel, agrees there is a "degree of schizophrenia" in Asda's pricing strategy. This has been further compounded by a parallel marketing drive aimed at highlighting the quality of the chain's products.

Asda has been attempting to emphasise quality as well as value in an effort to stop shoppers switching over to rivals perceived to offer both ethically and locally sourced produce. However, this has been undermined by cutting back the range available in certain Asda stores, a strategy Garner believes was promoted by Darren Blackhurst, one of Clarke's rivals for the top job before his departure from Asda in May.

"Effectively, the whole market has shifted since 2008," Garner says. "And though shoppers are still looking for value, other considerations such as ethically sourced coffee and high-quality produce are increasingly important.

"To a degree, that has wrong-footed Asda."