In the first address to leaders since the CMA’s decision to prohibit Asda’s proposed merger with Sainsbury’s, CEO Roger Burnley thanked colleagues for their “amazing achievements and focus” over the past 12 months and during the merger process.
Looking to the future he said there was no change in direction and called on them to continue delivering Asda’s strategy of; winning on price, delivering consistent customer experience and driving growth where customers care.
Pointing to Asda’s seven successive quarters of growth in a difficult trading environment, Burnley emphasised that the supermarket’s strategy is working, but acknowledged the trends are accelerating faster than expected and noted it would be harder to deliver the strategy at the same pace, without the synergies that the merger would have provided.
He told attendees to “forget the language of Plan A and Plan B – there has always been one clear strategy for Asda ... it requires momentum in the short term, growth in the medium term and sustainability in the long term ... we need to prioritise and focus on what will make a difference to customers versus what won’t.”
Burnley said they would “accelerate our price position”, as well as continue to invest in technology to ensure it provides a consistent and trusted customer experience, and grow where customers care.
In a series of presentations from Asda’s Senior Leadership, colleagues were briefed on plans to invest £80 million in the price throughout the rest of 2019, ensuring investment is in areas that are most important to customers.
Noting that ‘ease is almost as important as price’ to customers, it was confirmed that the supermarket would maintain its current focus on delivering a consistent customer experience, underpinned by new initiatives and trials of new technology to help accelerate its absolute focus on a ‘hassle free’ shopping experience – including a test on same-day delivery on groceries. Having launched mobile Scan and Go to customers in 25 stores last week there is an ambition to roll further still over the course of the year. In addition, there will be additional Click and Collect collection towers installed in Asda stores, which are already proving popular with customers.
It was also confirmed that the retailer’s Stevenage store would become a ‘tech store’ where a range of new technology solutions would be implemented to help the retailer understand the benefits of a number of different technologies working together.
Colleagues were reminded in the pursuit of driving growth where customers care “Innovation is in our DNA” and that every colleague has the ability to act and "be an entrepreneur" – be that through technology, products or processes. They were invited to submit their ideas through the businesses ‘Innovation Den’ with new opportunities being funded through an innovation seed fund, with the focus on "think big, start small, learn and scale fast".
Investment continues in George.com to improve the customer experience and ensure it is ready for next day Click and Collect later in the year. Meanwhile, it was noted that the supermarket has increased the amount of space dedicated to ‘Free From’ ranges by 30% in the last year, driving sales growth. Asda’s in store parcel collection service, ToYou is delivering strong growth and allowing Asda to "work in partnership with complementary brands that our customers love and make our stores more attractive propositions to visit."
In addition to briefings on key trading initiatives, managers were also asked to continue to prepare colleagues for the ongoing need for change, referencing proposals that are currently in consultation to invest in increasing colleagues base rate of pay as well as asking for greater flexibility in ways of working.
Colleagues were reminded of the retailer’s commitment to taking action on issues that matter to customers through its ‘Create Change for Better programme’. In the past 12 months the supermarket has removed 6500 tonnes of plastic from its operations, removed single pack knives from sale and provided over 5 million meals through its Fight Hunger Create Change partnership with FareShare and the Trussell Trust.
As well as updates from Asda’s Leadership Team, attendees also heard from Walmart International CEO, Judith McKenna, who spoke of her pride at being able to represent Walmart to Asda colleagues, and to have the opportunity to thank them for their focus and dedication during the merger process. She said: “You were a good business going into the merger and under Roger’s leadership you – all of you – made this a stronger business over the last year. I believe that looking ahead, you have the potential for even greater things, and Walmart will ensure that you have resources to do that.”
McKenna also acknowledged commentary around Asda’s future, stating "much of what you’ve heard is just speculation". She explained: "Walmart does not have a one size fits all approach to operating its international markets, but a consistent focus on strong local businesses powered by Walmart." However, she confirmed that “While we are not rushing into anything, I want you to know that we are seriously considering a path to an IPO – a public listing – to strengthen your long term success."
She added that any preparations for IPO would "take years" and that colleagues' primary focus should remain on delivering its strategy to “make you the best Asda you can be”.
Concluding her speech, McKenna noted: "Now is the time to stay focussed. You can drive sales in your store and make a difference to your customers and colleagues. This is not a market where success comes easily or without a lot of effort, but you have the skills, the tools and most importantly the attitude to be successful."
Closing the conference, Roger Burnley reminded colleagues: “We have a mountain to climb – continuing momentum, into growth, and ultimately, sustainability – but we can make a difference. We can be brilliant for our customers today. And we can be brilliant for our customers in the future."