Asda shapes its local offer

10 November, 2006
Speaking at the recent British Society of Baking conference, Asda bakery director Huw Edwards revealed how local tailoring of its bakery goods offering has brought dividends to the retailer, but that there is still much to do. Andrew Williams reports
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Bakery buyers may be sobbing in the aisles - and one or two tertiary bakery suppliers, no doubt - as the one-size-fits-all approach to filling the supermarket bakery concessions across the land is ditched, with the focus shifted onto locally sourced products, premium, indulgent products and organics.
Asda is simplifying its number of SKUs and is focusing, at a store- specific level, on tailoring its bakery offering to a locality - a move which has paid off this year, according to bakery director Huw Edwards. "Buyers are very protective of their products. But we have to prise some of these products out of the buyers' hands and focus on what the customer really wants."Whereas a whole range of Bakewell tart brands, for example, may once have competed on-shelf, the new approach is to "take some tough decisions" by whittling down the offering to one value, one mid-market and one premium product in some cases. The challenge is to edit down the bewil- dering amount of choice and make the bakery buying experience less frightening, he said."There is now so much choice that it almost paralyses the customer," said Edwards. "The customer might only spend 20 seconds in the bread aisle, so you've got to make it easy for them to find what they want. Most people find shopping a chore. Everything we do must be about making the shopping experience easy."Key to Asda's strategy has been sourcing local baked goods, as well as "bringing the buying power of our business to give customers great prices on national brands". Some stores have their own display unit for local products, while in others, more space is being allocated for local products in the fixture where appropriate. "We've taken some tough decisions about national brands," said Edwards. "If there are three big brands, we will only offer two of them in-store, if that's what's relevant to the consumer in that store."There are massive differences in demand from store to store, even within regions, he said. "What we thought was fairly uniform is not. In Scotland we sell an awful lot of Kingsmill; in the south we sell a lot of Hovis."Asda's in-store business is growing faster than bought-in, revealed Edwards, with big improvements over the last year where previously there had been "inhibited growth". "We've focused on operational excellence this year," he said. "We have a network of 'stores of learning', we've upgraded our [training] packages, and we've got a team of specialists who relaunch stores that aren't driving success." A total of 45 failing stores have been relaunched successfully this year.Asda is also launching more speciality products. The retailer has seen 80% growth in its Extra Special premium label this year. Meanwhile, although a small market in growth, organics remains a big consumer pull, with sales up by 50%. "It's clear that you've got to be in the organics market to get people through the door, even if they only buy one or two products," said Edwards.Portion control is another trend, with sales of larger products, such as whole cakes, falling off in favour of smaller packs. "It's far more successful to produce a really great product in a two-portion pack - you have the treat, it's gone, there's no more temptation. You can go back to eating your salads," said Edwards. The successful launch in Asda of a super-indulgent chocolate muffin twin-pack pointed the way forward, he added. "There is a declining market for cakes in lunchboxes. What was a major part of the [cake] market is in decline. So we're looking at other avenues and indulgence is an area where we can make a difference, getting people to trade up."On the healthy eating side, the baking industry has some way to go before it matches the impact of the cereals industry in promoting wholegrain products, he noted. "Neither we retailers nor the manufacturing base have covered ourselves in glory in the way we've marketed wholegrain. The cereals business has plastered every TV screen and magazine with wholegrains and healthiness. It's something we've all got to work at." Retailers need to encourage shoppers to try products by developing cross-merchandising or on-shelf information to link breads to eating occasions, said Edwards. Competitive pricing, offering good value, and a promotional strategy will continue to see shoppers trade up. "A balanced use of those mechanics has helped us to grow the business," he said. "All the markets are growing, both in volume and sales. It seems we're pressing the right buttons for our customers." n----=== Asda comment ===n On training: "One of the big issues for all of us who operate in-store bakeries is skill levels and getting enough bakers to run those bakeries effectively. It's tough to find them and keep them."n On availability: "It's the biggest focus in our business and we're starting to make headway. We need the baking industry's help - it's about how we work in our stores, but also about how accurate the deliveries are."n On the in-store experience: "We're putting better and better products into our stores. We can't have clinical stores. We need them to be inspirational."n On in-store organic production: "We're not baking organic in-store at the moment. We're looking for products that could be baked in the packaging to maintain the integrity of the product, but we've got to find a way of doing it well."



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