As Asda posted an 11th consecutive quarter of declining sales this week, owner Walmart insisted its beleaguered British business was on the right track.
The US retail titan’s boss Doug McMillon told the media that “some progress” had been made and that Asda was on a journey “back to a position of strength”.
Whether or not you believe the tales of “momentum”, given that Asda’s 2.8% drop in first-quarter sales was in comparison to last year’s 5.7% slump and a 3.9% drop in 2015, is an altogether different question.
But one thing is for certain – Walmart has the power to shunt Asda’s road to recovery into a higher gear.
“Cost-cutting at Asda House and on the shop floor has run too deep in order to preserve short-term profits, at the expense of long-term performance”
For too long, Walmart has tapped into the best parts of the Asda business to turbo-charge its success across the pond.
A brain drain has seen Asda leaders such as Dave Cheesewright, Judith McKenna, Mark Ibbotson and Rob McWilliam plucked from positions at Asda to take on senior roles in Bentonville, Arkansas.
Cost-cutting at Asda House and on the shop floor has run too deep in order to preserve short-term profits, at the expense of long-term performance.
And Walmart has looked closely at Asda’s work in stores and online to help shape its self-service checkouts and click-and-collect propositions, both of which are gaining traction among American consumers.
Having taken profit, plans and personnel from Asda over the past decade, now is the time for Walmart to properly repay the favour.
Yes, the global grocery and general merchandise giant has handed Asda a new chief customer officer in Andy Murray and, more recently, a new boss, Sean Clarke.
However, the two men upon whom much of Asda’s fate rests cannot be left high and dry by its parent company.
Chunky withdrawals from the ‘bank of mum and dad’ are needed – and fast.
Walmart’s pockets are famously deep and it has already, to its credit, sanctioned heavy investments in price.
But as Asda has found out the hard way during three years of sales decline, that is no longer enough when competing with the discounters.
Innovative and exciting
This time a year ago, Retail Week was packing its bags to jet to Bentonville for Walmart’s shareholders’ meeting.
We bore witness to a stream of innovations in Arkansas that could genuinely spark an Asda resurgence.
Walmart’s stores, in the main, are pleasant places where consumers actively want to shop.
They are clean and tidy, signage is bright and colourful, deli counters are staffed by friendly and knowledgeable employees, and visual merchandising is top-notch.
Asda cannot at present claim to tick many, if any, of those boxes.
But perhaps most importantly, Walmart’s ranges are innovative and exciting.
“Getting customers back through the door and hooked on innovative products that none of its UK rivals can offer could be a pivotal step in Asda’s recovery plan.”
As part of our trip to its hometown, we visited Walmart’s Culinary and Innovation Centre, where deep-fried twinkies, pizza rolls, wacky Oreo flavours and barbecue baked beans made with whiskey were among the unique products on the menu.
Shipping such lines across the Atlantic into Asda’s proposition would help rejuvenate an ailing product mix that has become bland in comparison with its rivals and fuel shoppers’ appetite to return.
Getting customers back through the door and hooked on innovative products that none of its UK rivals can offer could be a pivotal step in Asda’s recovery plan.
Clarke and Murray must now convince Walmart to make that happen.