Asda mums predicting a gloomy outlook

Launching a new quarterly piece of research called ‘Mumdex’, based on a survey of 4,000 Asda mums, Leeds-based Asda said that 43 per cent of mothers believe the UK economy will never be the same again.

In its findings, Asda said: “Asda mums are gloomy about the future of the UK economy, with a significant number worrying that things will never fully recover.

“Mums’ pessimism is driven by a lack of faith in the Government’s ability to alleviate the economic situation and a belief that politicians are not representing their best interests.”

Asda, the UK’s second-biggest supermarket chain after market leader Tesco, said like-for-like sales excluding fuel and VAT sales tax, rose 1.0 per cent in the 14 weeks to January 7.

This was down from a 1.3 per cent increase in the third quarter, but compared favourably with many of its rivals.

The performance prompted chief executive Andy Clarke to say: “We won Christmas. We were the clear winners.

“Customers trusted us and shopped with us at Christmas. In 2012 we’ll focus on price leadership.

“It will be tough, but we’re optimistic.”

Asda said like-for-like sales rose just 0.1 per cent in the last three months of 2011.

This meant that the 1.0 per cent increase was mostly achieved in the first week of January during the sales.

Asda’s festive figures soundly beat Tesco’s 2.3 per cent fall in UK like-for-like sales for the six weeks to January 7.

However, they came in below Sainsbury’s 1.2 per cent increase for the 14 weeks to January 7.

Bradford-based Morrisons reported a 0.7 per cent increase in like-for-like sales in the six weeks to January 1, but these figures didn’t include the first week of the January sales.

Asked about recent economic statistics that show a pick-up in the economy, Mr Clarke said it was good to see growth in the general economy, but customers are still finding life challenging. He added it was too early to say if the positive recent data represents a turning point or is merely a blip.

Asda said it expects to benefit this summer from celebrations to mark the Queen’s Diamond Jubilee, the Euro 2012 soccer championships and the London Olympics.

“Last year activity in events drove behaviour,” said Mr Clarke.

“When we have events in place our customers shop with us because the extra personality that Asda offers brings people in.”

The supermarket group, which trades from around 540 stores, lagged Britain’s grocery market in 2010 but fought back in 2011, helped by its purchase of smaller format Netto stores and a re-launch of its own-brand food range under the ‘Chosen By You’ name.

But the real differentiator has been Asda’s ‘price guarantee’ scheme, which refunds customers if their shopping isn’t 10 per cent cheaper than rivals.

More than one million customers checked their receipts every week in December, before coming back down to settle at around 500,000 a week.

Asda’s finance director Rob McWilliam said that the number of receipts checked has risen by over 500 per cent since Asda launched the ‘price guarantee’ scheme at the start of the year.

“It’s driving increased loyalty,” he said.

“The Asda ‘price guarantee’ represents a promise to be 10 per cent cheaper. We’ve tried to incentivise customers to take that challenge.”

In addition to the scheme and the relaunch of the own-brand label as ‘Chosen by You’, Asda reported strong growth at its ‘Extra Special’ brand, which was launched in partnership with Leiths.

Asda said that ‘Extra Special’ was the fastest growing premium own label brand in December.

The group also pointed to strong growth at its online business. Sales through asda.com rose by almost 20 per cent during the last three months of 2011.

Analysts at retail research agency Conlumino said: “After some difficulties last year, Asda now seems to be successfully straddling the quality-price equation and will, in our view, be one of the major beneficiaries from Tesco’s current difficulties.”

Tesco kicked off a price war last October when it unveiled its £500m ‘Big Price Drop’, with Sainsbury’s launching its ‘Brand Match’ scheme shortly after.

But Tesco recently admitted its pricing strategy had failed after a disappointing Christmas per- iod.

Asda is to invest over £500m this year, opening 25 new stores and three depots and creating up to 5,000 jobs.

Separately, Asda’s American parent company Wal-Mart, the world’s biggest retailer, posted fourth quarter sales and profit that fell short of Wall Street expectations.

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