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Asda Own-Label Surges As Shoppers Trade Out Of Brands
by Kathy Gordon - 14/10/2011
"Asda Supermarkets, the U.K. grocery chained owned by Wal-Mart Stores Inc (WMT), has seen sales of its own-label brand surge in the year since its launch, as consumers trade out of brands to save money amid the economic gloom."
Speaking at a conference hosted by grocery industry body IGD, Asda Chief Executive Andy Clarke said the group's mid-range Chosen By You private label range now accounts for 40% of the grocer's food sales and is the fastest growing own-label brand in the U.K., according Kantar data.
Similarly, J Sainsbury PLC's (SBRY.LN) Group Commercial Director Mike Coupe told the conference the company's mid-range By Sainsbury products accounted for one-third of total sales of GBP21 billion.
All the grocers say that U.K. consumer behaviour has shifted noticeably as rising food and fuel prices coupled with slow wage growth conspire to squeeze disposable income.
Kantar Worldpanel's latest grocery market share data published Tuesday shows that the market grew 5.1% in the 12 weeks to Oct. 2 but inflation was running at 5.7%, implying the volume of grocery sales has declined.
The shift in consumer behaviour has forced the supermarkets to increase promotional activity to try to grow market share in the face of stiff competition, and Tesco PLC (TSCO.LN) launched its Big Price Drop last week, prompting all its large rivals to up their own price game.
Asda has run its own 10% cheaper price guarantee since the start the year and Clarke said that the company's commitment to this price promise means it has made price moves where it feels it needed to, although he added that it isn't just in response to Tesco.
"It's a very competitive market," he told reporters on the fringes of the IGD conference, adding that Asda continues to invest in pricing but hasn't changed its strategy from four weeks ago.
Sainsbury Sunday announced a branded price matching campaign that offers shoppers coupons at the till if Sainsbury are more expensive than Asda and Tesco on certain items, while Wm Morrison Supermarkets PLC (MRW.LN) has also upped promotional activity in its nine-month long Big Price Crunch campaign.
-By Kathy Gordon, Dow Jones Newswires; 44-207-842-9293; kathy.gordon@dowjones.com
More Details: http://online.wsj.com/article/BT-CO-20111011-709298.html
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