Rivals unsettled by price guarantees says Asda
23 February 2011 09:57
Supermarket chain Asda has claimed that its price guarantee initiative has "ruffled" the feathers of its rivals.
The UK's second-biggest supermarket group said like-for-like sales increased by 1.6% in the final quarter of 2010 after it revamped its own label ranges and introduced a guarantee in April that its prices would be cheaper than those of its rivals. And since it improved its price guarantee in January, pledging to sell groceries at least 10% cheaper than major rivals, the scheme has been used by 800,000 customers the retailer claimed.
In the fourth and final quarter, sales were boosted by a "good Christmas" as the group bounced back after six months of declining sales. Last year, Asda relaunched its Chosen By You range and revamped its Extra Special premium range after new chief executive Andy Clarke admitted it had not focused enough on the quality of its food.
The Walmart-owned chain announced today that it would launch another 2,000 products under the Chosen By You range, bringing the total to 5,000, and said Extra Special was now the fastest growing premium range of its supermarket rivals.
In addition, Asda also announced the launch of a new premium homeware brand called Elegant Living, which was sourced with American parent company Walmart and will be 30% cheaper than its rivals.
Mr Clarke said he was "pleased with the progress we've made in the last six months."
He added: "The Asda Price Guarantee is a game changer - our customers are starting to use it more.
"The renewed focus on everyday low pricing underpinned by the Asda Price Guarantee has got our rivals a little ruffled.
"We have enhanced the quality of our products at no extra cost to our customers."
Asda was recently reprimanded for its original price guarantee adverts by the Advertising Standards Authority following complaints from rivals Morrisons and Tesco, who complained that the ads were misleading for suggesting that Asda was generally cheaper than themselves.
Sainsbury's also claimed that there were significant exclusions from the price comparison.
Asda also warned that consumer confidence is facing a "perfect storm" due to rising prices and Government cutbacks. Mr Clarke added: "People are very worried about things like unemployment and the change in the public sector jobs will start to generate a different level of confidence and job security is right up there in customers' minds. Confidence will become even more challenging this year."
However, he was confident that Asda would continue to be Britain's second-biggest grocer and dismissed industry figures that showed its share of the grocery market was overtaken by Sainsbury's in December as "a blip."
Retail news is updated every weekday and is provided courtesy of: 
