Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

Asda Stores Ltd. (Asda) is a British supermarket chain offering food, clothing, general merchandise, toys and financial services. In 1999, Walmart Stores Inc. acquired Asda for £6,700 million. In 2010, with a market share of 16.9%, Asda became the UK’s second largest supermarket chain after Tesco. Asda has been named Britain’s Favourite Supermarket of the year at The Grocer Gold Awards – the Oscars of the food and drink industry – as well as being crowned Best Priced Supermarket for the 14th year running.

In fiscal year 2011 (ending January), Asda accomplished a slight increase in revenues, from $31,200 million in FY2010 to $31,800 million in FY2011, accounting for 7.6% of all Wal-Mart Stores, Inc. sales.

Asda’s brand value slightly decreased from $10,689 million in 2010 to $10,122 million in 2011. At the same time, enterprise value decreased by 7.4% to $21,313 million. Moreover, Asda did not manage to maintain its AA brand rating and was downgraded to AA- in 2011.

 

Positive Aspects

Crowned Best Priced Supermarket for the 14^th consecutive year

The title of Best Priced Supermarket is based on a survey carried out by The Grocer every week comparing the prices of 33 everyday items across all the main supermarkets. It found Asda was best for price 32 weeks out of 49. Asda’s Chief Marketing Officer Rick Bendel stated “because of our commitment to be 10% cheaper through the Asda Price Guarantee, customers can be reassured that we’ll work just as hard in the year ahead to win the award for a 15th time.” This award is actively used in Asda’s marketing and PR activities.

Negative Aspects

Bad image transfer due to ongoing Walmart sweatshop scandals

Since belonging to the U.S. retail giant Walmart, Asda is often linked to sweatshop scandals Walmart has been involved in. Over the last years, Walmart came under increased pressure being accused of releasing misleading reports on its labour conditions and of major labour rights violations in its factories located in Indonesia, China, Bangladesh, Nicaragua and Swaziland. In 2010, Walmart was repeatedly listed in the Sweatshop Hall of Shame published by the International Labour Rights Forum. Further, through the foundation of the Sweatshop, Warehouse, Walmart Worker True Tour, former Walmart workers get the chance to report about the retailer’s labour violations, specifically dealing with forced overtime, verbal and physical abuse and low wages. The retailer has not only to bear the actual costs of these accusations, but rather has to fear the loss of its image among customers. These sweatshop scandals certainly result in a bad image transfer for Asda, which already finds itself involved in labour scandals itself. According to ActionAid International, a British charity fighting poverty across the globe, Asda falls behind in its effort to improve conditions for women workers in poor countries, whose wages are keeping them trapped in poverty. Especially after announcing to become the UK’s biggest non-food retailer within five years, Asda should regain its positive image in order to keep its existing, as well as to gain new customers.   

Asda does not run a customer loyalty programme

Unlike many other major retailers, Asda does not have a customer loyalty programme. CEO Andy Bond famously said "You can't buy loyalty with plastic points", further stating on their corporate website that “at Asda we reward all of our customers for their loyalty by charging low prices every day of the week, all year round.” However, through solely focussing on its Everyday Low Prices strategy instead of introducing a customer loyalty card, Asda may not only breed disloyal customers, but rather misses out on the opportunity of gathering valuable customer insights that could be used for specifically tailored marketing messages.

 

 

Last changed September 9, 2011

League tables

ASDA appears in the following brand league tables:

Rank 91 in the Global 500 2012.
Rank 10 in the Best Retail Brands 2012.
Rank 80 in the Global 500 2011.
Rank 80 in the Global 500 2011.
Rank 10 in the Best Retail Brands 2011.
Rank 8 in the UK Top 50 2011.
Rank 81 in the Global 500 2010.
Rank 9 in the UK Top 50 2010.
Rank 107 in the Global 500 2009.
Rank 127 in the Global 500 2008.
Rank 133 in the Global 250 2007.