Strong growth at Asda

20 October, 2006
Page 4 
Asda painted a "pretty rosy picture" of its bakery department reporting 6.5% year-on-year value growth and 3% volume growth at the British Society of Baking's Autumn Conference this week.
Director Huw Edwards told over 70 delegates that the value of all three sectors at Asda was in growth, according to TNS figures. Morning goods sales were up 4%, cakes up 5.3% and bread up 9.7%. Volumes were also up, but growth was mainly due to "premiumisation" rather than volume.Edwards said a new Asda strategy of "every day low pricing" (EDLP) combined with targeted promotions was boosting sales. He commented: "We went a bit too purist on EDLP at one stage. We are maintaining a good price position combined with promotions. A balanced use of these mechanics has grown the business."Edwards said Asda had seen 80% growth in its Extra Special range, with organics up 50%. Asda planned to "catch up and overtake" Sainsbury's on organic.And he issued a rallying call to bakery suppliers to improve marketing of healthy wholegrain products.He commented: "We have not covered ourselves in glory on marketing. We have got to be better at informing our customers. You see acres of pictures of wholegrains in the States."He added: "We have not got our share of voice when we compare ourselves with the (breakfast) cereals industry." Edwards said Asda believes that the health trend has not reached its peak yet, singling out "localness" as another key trend.He said ranges were decided on a local store level: "We have had to take some tough decisions about national brands. We might only have two or three of them in a particular store because that is what is relevant. There are massive differences; it has been a great learning point for us."In cakes Asda was focused on indulgence and portion control, for example selling two individual portions rather than a whole cake. Edwards said standard bought-in cakes sales were being hit and a "major market is being turned off" as local authorities ban cakes from children's lunch boxes.On the morning goods side, there was strong growth but availability was an Achilles' heel. The category was "very expandable", Edwards said.



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