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Andy Bond President of Asda Wal-Mart gives a direct warning to retails on cost controls

In a recent retail lecture Andy Bond, President of Asda, gave retailers a stark warning that they will have to “keep costs down by thrift, using standard-class train travel, printing out less paper and challenging employees to save £1 a day.” He then continued to say “Does all that sound like penny-pinching? Do you consider thrift is beneath you? Are you happy to go on running your business the way you’ve always run it? If you answered ‘yes’ to any of those questions then let me warn you: you’re living in the past and in the future you may not be here.”

By: James McGregor
Category: Business:Management
: Food
Posted: May 28, 2009
Updated: May 28, 2009
Views: 159


At the first Annual Retail Lecture conducted by the BRC (British Retail Consortium) Andy Bond President of Asda, discussed the changing landscape of retail and a shift in customer attitude towards value “There appear to be increasing signs that we may be at the bottom of the cycle and green shoots may be appearing. But don’t let this fool you. While consumers may be ready to shop again, the recession will have definitely created a good degree of long-term behaviour change.”

According to Bond, consumers are beginning to revaluate what and how they purchase; retailers will no longer be able to drive higher margins through so called ‘specialist’ categories, Bond quoted that the organics industry is negative 30% yoy whilst ASDA is positive 25%. This gap he feels is driven from the fact that ASDA is not boosting its profit margins by charging the customer a premium for its organics range.

Customers want choice, quality and service but will not pay an unnecessary premium for it, retailer’s margins have to come into line and they will have to keep costs down by thrift.

Bond warned retailers that whilst we will see an upturn within the economy, consumers expectations will change forever; the consumer of the future will be more empowered, creative and will seek transparency; most of all the consumer of the future will demand value. For those companies who do not embrace this shift, he told, “you’re living in the past and in the future you may not be here”.

About Author

Retail-Remedy is a management consultancy focused on supporting the growing requirement for retailers to improve their operational efficiency. Retail-Remedy’s objective is to support retailers improve profit growth through; margin improvement, service enhancement and cost reduction.

Retail-Remedy have an in-depth understanding of food, non-food and apparel retail, and have supported; Wal-Mart, Sainsbury’s, ASDA, DSGI, Focus, Wickes, George and Seyui to name but a few. “We are often called upon to support retailers with change programmes that require a detailed understanding of the sector. We pride ourselves on being able to offer a combination of off-shelf solutions and bespoke services to meet the requirements of each company we work with, the one thing that we always focus on is ensuring that what we deliver has a positive impact on our customers profit position.”

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