As part of its objective to have its private label products’ price-points only five per cent above those of Lidl and Aldi (at present they are about ten per cent higher), Asda has entered into negotiations with a number of its suppliers in order to trim prices by up to ten per cent, TheGrocer.co.uk reports.
The Walmart-owned supermarket chain has said this can be accomplished through using less expensive recipes, ingredients or packaging, or a combination of these. It also aspires to change its business model to one that more closely resembles German discounters, through shrinking the numbers of products in its lines by up to 25 per cent.
The company is "working collaboratively with suppliers" to achieve these goals, it has said.
"Value is an important part of it. You can see what’s happening with the discounters and other competitors. We have got to make sure our customers are getting the best value we can give them," said Andrew Moore, Asda chief merchandising officer.
"This isn’t Asda coming in with a big bat and trying to make suppliers hit a particular price point. We are talking to big suppliers about what we know customers want in terms of range, assortment and quality and working with them to provide that."
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly. To subscribe to ESM: The European Supermarket Magazine, click here.
