Less Is More means good news for ASDA, less choice for you
It won't be long before the shelves of ASDA are looking like a food warehouse at the Dharma Institute. Owners Wal-Mart have recently begun rolling out a sales strategy in the US called Project Impact, which sees the moon-sized hypermarkets reducing the number of products they stock by up to 15% - so more shelf space can be given over to best-sellers.
Obviously, this strategy also allows Wal-Mart to negotiate fatter margins for themselves and lower prices for the customers, but it also sounds the death knell for other brands - one company saw its value drop by a fifth when Wal-Mart ended its supply contract. Another upshot is that the world's biggest companies become more bloated; Wal-Mart made $4.3 billion in profit last year, and accounts for 15% of Procter & Gamble's sales, and over a third of Del Monte's business.
How is this playing out in your local ASDA? UK stores have been operating their Less is More campaign, and according to The Guardian have reduced the number of products in-store by a staggering 30%. According to ASDA, devoting more space to fewer products means they get better prices for branded essentials, even if that means restricting choice and reducing pressure on suppliers to be competitive.
Still, there's still plenty of room for creative pricing at ASDA. The Grocer investigated their latest Roll Back promotion with almost 1000 products rounded to £1, and found nearly one fifth had their prices rounded up, which meant they cost more in July than they did in March, before the Roll Back began. Hooray for value!