New CEO looks to change strategy and customer perceptions as sales slip for second consecutive quarter

Asda will next month embark on a “root and branch” change in strategy to focus on the quality of its products.

The grocer, which reported its second consecutive quarter of declining sales this week - down 0.4% in the period to July 31 - plans a launch event to kick off a marketing and advertising campaign to push quality.

Chief executive Andy Clarke told Retail Week: “We have been known for our low prices for a long period of time but we also want to be known for quality. My heritage is an agricultural background and food values are key for me. [Shoppers] will see a step change in how we present food in stores and the quality will be stressed to customers.”

Clarke said that work has already started on improving quality, and the grocer is now ready to “share with customers and the wider world” its strategy.

He said: “All Asda-branded products are free from artificial colours and flavours but that’s never been given the air time it deserves and it is these changes customers will see.”

Asda has suffered since the start of the year, when previous boss Andy Bond admitted the retailer had become too promotional.

The latest Kantar Worldpanel figures for the 12 weeks to August 8 revealed a dip in Asda’s market share of 0.3%. Rival grocer Tesco was also down, by 0.2%, while Sainsbury’s and Morrisons both increased market share by 0.2%.

In April Asda changed its strategy to focus on Everyday Low Prices, and over the past three months it has stripped out a third of its multi-buy promotions.

It also launched the Price Guarantee, an online tool, which promises shoppers that it will offer the cheapest groceries or give customers their money back.

It has lowered the price of staples such as milk and bread over the past few weeks, which Clarke said is “opening up our price advantage” in comparison with its competitors as “when we lower our prices it’s for the long term, not just for a promotion”.

He said he is “not concerned” with previous performance figures as he is “confident that the strategy we have started and have in place is right for the long-term benefit of the customer and for Asda”.

Asda bought discounter Netto earlier this year, and is waiting for approval from the Office of Fair Trading. It will also open its second home shopping centre next week, in Enfield, where it will pick stock for online delivery.