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March 17, 2011

UK: “Value will win this year”, says Asda CEO Clarke

The CEO of Asda, the UK's second-largest retailer, has said "value will win this year" as he expects 2011 to be a "tough year".

The CEO of Asda, the UK’s second-largest retailer, has said “value will win this year” as he expects 2011 to be a “tough year”.

Speaking on the sidelines of the Retail Week Conference today (17 March) Andy Clarke said the retailer is “winning customers” on a like-for-like basis, which “could be down” to people moving towards value.

Clarke said he expects trading to become tougher, saying retailers have “had it easy” in recent years.

“It would have been harder to fail than to succeed,” he said, referring to favourable trading terms with manufacturers, relatively cheap energy and commodity costs combined with low levels of inflation.

With food prices on the rise, he said Asda is working to “challenge ourselves first” before passing costs onto its customers.

“Whatever happens in the market we want to maintain the best value position,” he said.

Clarke has been buoyed by the success of its Price Guarantee, saying it is seeing “more people go online to check” and that it is “continuing to grow”.

He said that consumers are seeking transparency from retailers and supermarkets needs to end non-comparable product price comparisons, for example comparing prices on differently sized products.

Additionally, Clarke spoke out against retailers unnecessarily putting premium branding on products in order to push up prices, questioning the rationale behind creating a “premium tonic water”.

“We need to be careful of what we define as Extra Special,” said Clarke.

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