Asda sees itself as the cheapest of the big 4 supermarkets, but it’s struggling. It’s lost nearly 6% in sales this year alone and it’s market share has dropped to 12.5%, with Aldi, the king of the budget supermarkets, chomping at its heels with 11% market share.
Its two big hopes seem be their George clothing range (in the same way own brand clothing is working for Sainsbury’s and Tesco) and focusing more on being perceived as cheap. Perception is key.
How are they looking to do it? It’s a return of the ‘Rollback’ campaign (lowering actual prices), and also a new approach to pricing. Using psychology to get in the heads of their shoppers and make the cost of items appear super cheap. So, gone are the prices ending in a 0 or a 5 (eg: £3.00 or £2.95) which are all nice and neat numbers but feel like they’ve been arrived at artificially by rounding. And in are the prices ending in amounts like 76p or 93p as these look really specific as though Asda have tried to squeeze the price down to the absolute lowest they can get it.
It’ll be interesting to see in the coming months how well they manage to tempt shoppers down from Sainsbury’s and Tesco, and up from Aldi and Lidl, or whether their focus on price is a race to the bottom in a competition with the budget supermarkets that they just can’t win.
— Know your audience
