Asda’s figures for the 2014 calendar year are not bad in light of the extreme voucher-heavy competition over the Christmas trading period.

Asda’s figures for the 2014 calendar year are not bad in light of the extreme voucher-heavy competition over the Christmas trading period.

While the first full-year like-for-like sales decline since 2008 is obviously no cause for celebration, one gets the sense that Asda is very pleased by the fact that it outperformed a number of key competitors over the course of the year, both in terms of market share and the direction of travel of profitability.

While Andy Clarke sounded some fairly gloomy notes over the likely state of the market over the next two years, it was hard to walk away from the results meeting without feeling a decent degree of positivity for Asda’s prospects in the battlefield that lies ahead.

It is often overlooked just how relatively underexposed Asda is on a national level, both in terms of absolute store numbers and in terms of the dramatic regional bias that its store estate has.

Sure, a lot of these gaps have been filled in to some extent by online and click-and-collect, but – as Clarke himself knows – the vast majority of shoppers still want to walk into a store and fill a trolley up with groceries.

New store plans

With that in mind, Asda’s plans for new stores (be they superstores, supermarkets or the small but perfectly formed petrol station c-stores) make a lot of sense.

What is equally compelling is Asda’s blueprint for the future of its larger boxes. What Asda’s prototype units lack in terms of the sexy bells and whistles seen in concept stores offered up by rivals, they make up for in terms of economy and scalability.

Perhaps what makes us more optimistic than most about Asda’s prospects for the future is that the market seems to be heading in a more EDLP direction. EDLP (or a form of it, at least) runs throughout Asda’s operational DNA and they have the everyday low cost ethos baked into the way that they think and trade.

“Asda will be in a position to press ahead in a typically low key but focused and resolute fashion”

Bryan Roberts, Kantar Retail

If we are heading towards a less promotional market with generally lower base pricing, then Asda will enjoy a huge advantage – both in terms of operations as well as philosophy.

Moving from promotional to EDLP is a dangerous and time-consuming affair (as Walmart itself has discovered in countries like Brazil and Japan), so while competitors might be busy trying to wean their buying departments and shoppers off high-low pricing, Asda will be in a position to press ahead in a typically low-key but focused and resolute fashion.