Asda bridges gap with parent company and adopts Walmart slogan following dismal sales

Despite a £300m push at the beginning of the year, Asda has failed to entice shoppers through its doors and continued to see sales fall. In response, it has announced a major brand overhaul that will see it adopt the ‘Save Money Live More’ slogan of parent company Walmart and work closer with the US giant to gain a "strategic advantage" against its competitors.

The retailer’s woes were encapsulated in its latest quarter when sells slumped 2.6 per cent in the 12 weeks to January. This has dragged sales down for the whole year by one per cent. To reverse the decline, Asda is bringing marketing to the fore, using its revamped brand to spearhead its figtht back against the discounters and move it closer to parent company Walmart.

Market challenges

By chief executive Andy Clarke’s own admission, the market is “in one of its most challenging and changeable periods in history”.

It has tried to fight back, battling Lidl and Aldi’s growing popularity with a £300m investment ­– its largest ever – in a roll-back campaign at the beginning of the year that tied to its wider five-year strategy to plunge £1bn in lowering prices.

The price offensive has failed to charm shoppers and the supermarket has watched as its market share was eroded further by discounters, down from 17.1 per cent to 16.9 per cent this year according to Kantar.

'Save Money Live More'

Now Asda is turning to Walmart, adopting its sunshine logo and ‘Save Money Live More’ slogan, in a bid to “boost" the connection with its parent company.

“Although there has been a number of opportunities for a refresh, we’ve not touched the brand since 2002 and we’ve now seen the opportunity to make changes to the way it looks,” said Clarke, adding the move will see it invest £600m into creating new stores and improving existing ones.

The new slogan is one which Walmart implemented eight years ago after ‘Always Low Prices’ was axed. At the time, executives said it was not just a slogan, but a four word mission statement.

It came at a time when the US retailer was similarly battling to connect with consumers, who were turning away from conglomerates importing vast quantities of goods from Asia and driving trade out of small towns with the superstore format.

The addition of ‘Live Better’ was a move to convey what consumers get for low prices.

Asda will be similarly hoping to show that its low prices help people “live better”.

Clarke said of strengthened link: “We’re continuing to lower the price gap to the discounters, which is now around 10 per cent off Aldi and Lidl, and our connection to Walmart gives us a clear strategic advantage over our direct competitors for 2015.”

Unsurprising

Asda has been increasingly looking to Walmart to shape its businesses model. It was one of the first UK supermarkets to embrace the US retail phenomena ‘Black Friday’ while its marketing team - recently overhauled - has been working closely with their trans-Atlantic cousins to generate alternative revenue from the grocery site. So it has come as little surprise to some analysts that it has adopted Walmart’s marketing.

“Walmart didn’t want to see one of their international players being separate, different, or having a different structure or marketing slogan. I suppose it was inevitable and it sees it become less of a distinct Asda in the UK and more an implementer of owner Bentonville’s view,” said Phil Dorrell, partner at Retail Remedy and former head of marketing operations at Asda.

But not only has Asda taken on Walmart’s branding, the slogan is also considerably similar to that of Aldi, which runs with ‘spend a little. Live a lot’ and Sainsbury’s with ‘Live well for Less’.

“There is no differentiation, and frankly a slogan is not going to convince the majority of hard-nosed promiscuous shoppers in the UK to switch,” Dorrell adds. “The public at large will be oblivious marketing, when I was at Asda and we brought new in-store marketing in, and spent quite a bit of money on it, and frankly I don’t think anyone noticed.”

Asda’s turnaround begins in earnest now and the retailer has a little more than three years left to hit its marketing-led targets.

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