ASDA braces for hard year

UK supermarket chain cuts prices and also aims to cut waste with promotion of ‘wonky’ fruit

At the start of what it says will be the “toughest year yet” in UK retailing, Asda announced its biggest ever investment in price cuts and a campaign to reduce waste of ‘wonky’ fruit. The Walmart–owned UK supermarket chain is spending more than £300m (€391.6m) to lower 2,500 prices for fruit, vegetables and other basket essentials.

Among the changes: 750g of Russet apples cut £0.25 to £1, cucumber halves down £0.05p to £0.30, £0.77 off banana 10-packs to £1.35, and bell peppers cut from £0.77 to £0.57 each.

Asda said the price ‘rollback’ is part of its five-year strategy to invest £1bn in lowering prices and £250m in quality to cement its role in “redefining value retailing.”

‘Beautiful On The Inside’ promotion of ‘ugly’ fruit

Also in January, Asda launched a campaign in five of its stores to sell ‘wonky’ fruit and vegetables at a discounted price.It said this would help reduce food waste, support farmers and offer better value for money.

Crooked carrots, knobbly pears and wonky spuds will be labelled ‘Beautiful On The Inside’, bagged separately and sold at a reduced rate.

Asda produce technical director Ian Harrison said the campaign is the latest in a series of initiatives to show Asda’s commitment to helping reduce waste throughout its supply chain.

How Asda locked in low prices for seedless table grapes

Another example of supply chain improvements is Asda’s achievement last year of a 52-weeks a year seedless table grape supply.

Alberto Goldbacher from ASDA buyer International Procurement and Logistics Ltd (IPL), said this means much more than grapes on ASDA shelves year-round. Based in West Yorkshire, IPL’s grapes and stone fruit category manager said it had allowed the retailer to lock in low prices, too.

While other retail chains at times offer heavily discounted grapes, Asda is committed to stable, affordable prices through most of the year, “and that is what the consumer prefers.” Customers essentially want “simple prices” – low prices that are fixed, he said.

Consistent low prices spur sales growth

At the time of his presentation at ‘Grape Attraction’ last October in Madrid, Goldbacher said Asda had been selling 500g of seedless table grapes for £1.50 (€1.90) for 17 months. This followed 4-5 years when the price was around £2.

Other retailers would like to follow, but in terms of supply chain optimisation “we’re 16 months ahead of them.” They can offer grapes at that price for 1–2 weeks, but not consistently, he said.

This is an abbreviation of an article which appeared on page 34 of edition 135 of Eurofresh Distribution magazine. Read it for free here.