Asda’s sales have been under pressure from the discounters and it needs to work harder to win value shoppers.

Asda’s sales have been under pressure from the discounters and it needs to work harder to win value shoppers.

I think there is clearly a threat from the discounters which is hurting Asda. Where previously it would be able to mop up the ‘value’ spend from consumers trading down, this space is now far more competitive than before. Not only is it threatening the pool of shoppers who trade down.

They are stealing shoppers away from Asda. Improvements – of course – need to be made to price and quality which Andy Clarke has already committed to.

As with Morrisons, Asda needs to do more to communicate the quality message than it is at the moment. It’s one thing investing and making products better, it’s another thing making your – and more importantly – your competitors shoppers aware that your products are better.

Asda is in a good position to benefit from the current trends in the market. Andy Clarke and the management team seem to really have a grasp on the importance of integrating online with the existing store portfolio.

It’s one thing having a decent online food offer, it’s another making that a profitable and sustainable pillar of the business, something which will only be possible through greater penetration of click & collect.

Loyalty will be important for Asda too. More customers are switching, shopping around will continue and it isn’t going away as the economy improves as there hasn’t yet been enough of a benefit to real household incomes.

Asda needs to work harder to win shoppers loyalty, and it can only really do that by being in the right place at the right time.

Andrew Stevens is a senior retail analyst at Verdict Research