Wal-Mart to take Asda practises to Canada and South Africa
Rob McWilliam, Asda’s acting chief financial officer, starts as Wal-Mart’s strategy chief for Europe, the Middle East and Africa this summer and will take with him lessons learned from the U.K. supermarket chain’s development of private labels and its “value” credentials, he said today in an interview.
“There are certainly opportunities to share there,” McWilliam said by phone. The U.K. is “probably the most competitive of all the markets in terms of value,” said the executive, who will support David Cheesewright, the EMEA chief.
About 50 percent of Asda’s sales comprise own-brand items, which is “far higher” than in other markets, McWilliam said. The mid-priced Chosen By You range is Asda’s biggest own-brand label, and along with Butcher’s Selection of meats and groceries accounts for 90 percent of its own-brand sales. Asda also offers the higher-priced Extra Special line and value Smartprice label.
Asda has a guarantee to be 10 percent cheaper than competitors, attracting more than 500,000 online checks per week in the first quarter. Users may visit the grocer’s website and check the cost of the comparable grocery shopping at competitors. If it’s not cheaper by 10 percent, shoppers receive a voucher that can be redeemed at the checkout or online.
Canada, South Africa
Wal-Mart entered Canada in 1994 and had 333 stores in the country as of Jan. 31, out of a group total of 10,231. The retailer acquired control of South Africa’s Massmart Holdings (JSE:MSM) Ltd. last year, gaining nine wholesale and retail chains trading from 330 stores, according to Massmart’s website.
Asda, the U.K.’s second-largest grocery chain, said today that same-store sales rose 2.2 percent, excluding acquisitions, value-added tax and fuel, in the 12 weeks ended March 31. That was an increase on the prior period’s 1 percent gain.
The gross profit margin was “relatively flat” as Asda invested in low prices to lure customers, the grocer said.
“The market is obviously still a tough place to be,” as disposable income falls, McWilliam said. “Even tough customers are being very creative in helping them spread their disposable income, they actually don’t have the confidence to spend.”
Source: www.moneyweb.co.za