Andy Bond, chief executive of Wal-Mart’s UK supermarket chain Asda, has warned his rivals that price competition will become even more murderous next year, reports the Reuters news agency.
Bond told analysts and reporters at a strategy briefing on Tuesday that his aim was to increase what the Wal-Mart-owned food and general retailer said was its “price gap” over Tesco Plc, by far Britain’s largest grocer.
“Asda has always been about being the lowest-priced retail brand and I’m going to be more aggressive next year,” Bond said. “But I can’t predict how the other retailers, and Tesco in particular, will react.”
Bond admitted that his business had become too complex and that the group’s fresh food range had left a lot to be desired.
Despite a series of investigations by UK competition authorities that have exonerated the top food sellers from accusations of exploiting suppliers, the perception remains that these will feel the pinch as the big three slug it out.
Bond, however said that the price war would not be waged exclusively at the expense of suppliers — although he did hint at the tough negotiating to come.
“We’re not going to change our approach to supplier terms. We’re not going to get a club out and beat them over the head,” he said. “But we have significant productivity benefits to gain. We’ll be addressing our sourcing next year.”
Admitting his business was “operationally failing,” Bond promised differentiation from the competition in the form of improved service and new selling formats.