Asda fights back with £100m relaunch of its own brand label

New chief executive Andy Clarke launched the 'Chosen by you' range yesterday, following an intense nine months of testing and

reformulating products to improve their quality.

The new range is championing the consumer in order to focus on the sort of products that they want to see in store.

Some 40,000 consumers have taken part in 200,000 blind taste tests across the UK to produce the new range.

The move is part of a campaign by the Leeds-based grocer to add quality and service to its value principle.

"Asda has always focused on price and we will continue to do that, but consumers are also demanding quality and service," said Mr Clarke. "This is the biggest own brand relaunch in UK history."

The range will have 3,500 individual products including 500 entirely new ones and 1,000 reformulated products.

The 'Chosen by you' products are expected to make annual sales of 8bn-9bn.

More than nine out of ten Asda customers buy its own label products, but while the budget Smart Price products and upmarket Extra Special range have both gone down well with customers, the standard own label range has failed to make an impact.

Emma Fox, commercial director for the Asda brand, said the relaunch was a fundamental change to the mid tier own label brand. "Our own brand range accounts for half of our sales, but the most important range we have has been invisible and unloved," she said.

Simon Eyles, head of marketing for the Asda brand, said Asda has had "to face some hard truths".

"There was confusion about the Asda own label range," he said. "Customers didn't know why they bought it. There was no differentiation in store. This invisible brand is a massive opportunity for us. Our customers know best, not us. That's how 'Chosen by you' came about."

Mr Clarke said the new range would cost the same, or less, than it did before and will be up to 20 per cent cheaper than the equivalent leading brand.

Of the 100m that has been spent so far, around a third has gone on product improvement, a third on new packaging using the 'ASDA Chosen by you' logo and a third on marketing.

The new products include a range of cakes from Whoopie pies to Lemon Daisy cupcakes, freshly baked speciality and artisan breads, low fat soups such as Red Pepper and Wensleydale and bistro hot pies such as the Ultimate Steak Pie and Lamb Hot Pot.

Asda will use up to 400 suppliers to supply the new range, from small local producers such as Wakefield baker Speedibake, which is producing the new Mediterranean and Olive breads, to French pastries and croissants specialist Bridor, which supplies upmarket French patisseries.

The 'Chosen by you' range will focus solely on food for the forseeable future. When asked if it could be extended to non food areas, Mr Clarke was non-committal, but said: "Never say never".

Asda has been losing market share amid stiff competition from peers. The most recent figures from Kantar Worldpanel revealed Asda's share fell to 17.2 per cent from 17.4 per cent a year earlier – the ninth fall in a row. But Mr Clarke, who took over from Andy Bond earlier this year, is putting his faith in the relaunched 'Chosen by you' range.

"We're sending a clear message that Asda will now drive as hard on quality as it does on price."

Asda, which runs 377 stores, has been held back by opening fewer new stores than its rivals.

That will change following the purchase of 193 stores from discounter Netto. The Office of Fair Trading is expected to rule on the deal this week.

Tesco going online around the world

Supermarket chain Tesco, the world's third biggest retailer, plans to launch online shopping in China, the Czech Republic and Poland, according to its incoming chief executive.

Philip Clarke, who will take over in the top role from Terry Leahy next year, said he wants to expand Tesco's online offer around the world.

The retailer will start trading over the internet in Poland next year, followed by Prague and Shanghai and wants to sell over the internet in more overseas territories.

Tesco has already launched internet shopping in Korea and Ireland.

Mr Clarke, who currently runs the company's Asian and European arms, said he wants Andy Higginson, head of retailing services, to help put internet retail into more markets.

Tesco already has thriving offline markets in Asia and Europe.

In its last financial update covering the first three months of the year, Tesco reported growth in Asia of 15.4 per cent and 7.3 per cent in Europe.

Meanwhile in the UK, sales are growing more slowly, by 6.5 per cent, or 3.8 per cent on a like-for-like basis, in tougher trading conditions.

The company said: "The longer-term trends in our international business remain encouraging as the global recovery takes hold."