Retailers must back up low prices with good quality if they want to attract today’s consumer
I can’t resist mentioning the fact that, last week, we were named the lowest-priced supermarket for an incredible 11th year in a row. In an industry first, we also scooped the award for service and availability.
But the best part about it is that, earlier in the week, one of our closest rivals had branded us a one-club golfer. I’ll do my best not to bore you with too many golfing puns, but let’s just say that we’ve come on a fair way in the past few years. No longer can we be accused of being a one-dimensional retailer.
Our market share gains, at the expense of our more expensive rivals, are not simply the result of our value-driven brand. In the past two years, we’ve doubled our Fairtrade range, trebled our premium food range, extended our organic produce so that it is as good as anyone else’s and led the way in removing all the nasties from our food.
But we haven’t used this opportunity to inflate margins. Instead, we’ve stuck firmly to our belief that giving customers value – regardless of the price point – is the only sure-fire way to build their trust.
Our experience over recent months demonstrates that, when you start to attract a wider customer base, driven to you as they begin to watch the pennies, you have a unique opportunity to keep them for life – but only if you impress them.
Price is king at the moment, but don’t let the economic downturn mask the fact that consumers are becoming ever more demanding, whether it’s store cleanliness, product innovation or the reassurance that they can buy everything they want with the peace of mind that corners haven’t been cut or blind eyes turned in the process.
So, while there’s no doubt that the discounters and value-driven retailers like Asda are more relevant in today’s economy, low prices are only able to flourish if they are backed up with good quality.
That’s why retailers must work hard to keep their prices down. It’s important that we all do our bit to lock down inflation and instil confidence in consumers – regardless of their budget. With lots of debate surrounding the spiralling cost of living, it’s important that we take a more measured view on how people are faring.
While commodity prices are rising and a small number of products have doubled in price, inflation is still in the low percentage points across the average grocery basket. I’m not dismissing this as bad news for hard-pressed shoppers, but it’s not quite the scary-Mary situation some would have you believe. Let’s also not forget that retailers have, single-handedly, kept inflation at bay in recent times.
Now that it is creeping up, it’s important we all keep our costs in check, investing any savings we make in lowering prices, so that we can help our customers stay out of the rough.
If you fall foul of allowing prices to creep ever upwards, your customers will choose to shop elsewhere, leaving you plenty of time to work on your swing.
Andy Clarke, retail director, Asda