Quote:
Originally Posted by oliver1948uk
Walmart in the many years they have owned Asda have not managed to increase its market share. In fact, Sainsbury's has overtaken Asda as the second biggest supermarket. Walmart do not understand the UK market
|
For a while Asda was No. 2 overall when you factored in clothing and homeware sales but I believe they lost the position again and dropped back to 3rd and it is purely due to the number of stores versus Sainsburys and Tescos.
Quote:
Originally Posted by Gavin78
The snobbery in this thread makes me laugh from the "lower end working class types" shopping at Asda to the Sainsbury's upper class making out it's some kind of prestige place to go shopping.
|
true but Asda's business model has always been about price. They like to shout about customer service and product quality and loads of other stuff but in all honesty the only thing they have ever cared about is price and being able to advertise themselves as Britain's cheapest supermarket. They think that as long as stuff is cheap enough customers will overlook anything else which they would normally be concerned about. When you are focused on being cheap then you are appealing to a certain demographic. They won the Grocer 33 award something like 13 years running and loved to put all those adverts on tv during The X Factor letting everyone know how cheap they are but they can't do that anymore because Aldi and Lidl have taken over in the price war. This has left Asda in a bit of a rut because price was the only thing they had going for them. They once excelled in customer service and were No. 1 but Sainsburys and Tesco quickly learnt the benefits of that and adopted the same policies. To catch up with the competition they would have to provide better quality own brand products which either means less profit or increased price and they need to build bigger store so there is more space and you aren't playing dodgems with your trolley every time you go shopping. All that means increased cost and less profit which they aren't interested in. Everything is about profit which is why they are happy to merge with Sainsburys, you remove the operating cost of your own business, join an existing business which already has the foundations in place of where you mostly want to be (e.g. shopfloor space and stock process) and then just tweak it slightly to your business strategy for pricing. It is cheaper for Walmart to use Sainsburys than it is to start from scrath and build new Asda stores with increased space. As an example, Asda is the only supermarket which uses decades old monochrome two line checkouts, all the other supermarkets including Waitrose, Aldi and Lidl use colour touch screens tills. The reason why Asda don't make the change is because it will cost millions to do so and in their eyes provide no return (on investment). Upgrading the tills and technology may look good but it isn't going to generate them any extra sales or revenue and if it doesn't make them money then they aren't interested.