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© ASDA 2007. COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. A Supermarket’s Perspective On Local Sourcing.

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Presentation on theme: "© ASDA 2007. COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. A Supermarket’s Perspective On Local Sourcing."— Presentation transcript:

1 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. A Supermarket’s Perspective On Local Sourcing Richard Pearson General Manager, Local Sourcing & Ethnic Ranging

2 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Agenda  The strategic context  Local sourcing definition  Why it’s important to the customer  Asda & hubs  Our commitment to small suppliers  The future

3 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Asda’s Operating Principles Mission To be Britain’s best value retailer exceeding customer needs…Always Purpose To make goods and services more affordable for everyone Values Respect for the individual Strive for excellence Service to our customers

4 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Truly local stores We sell for less Stunning fresh food 20% Unique and Exciting George - the value fashion brand Hassle free shopping with personality Our people….do it fast; keep it simple and celebrate The Strategic Context: Asda Formula For Change

5 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Truly Local Stores People ProductCommunity

6 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. People

7 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. People

8 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. People

9 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Agenda  The strategic context  Local sourcing definition  Why it’s important to the customer  Asda & hubs  Our commitment to small suppliers  The future

10 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Asda Local Sourcing Definition Local Products are those which are : Made Locally Grown Locally –or Reared Locally –and are a Local Taste Local Delicacy –or Understood to be Local –and have Significant customer demand

11 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Product National Regional Local

12 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Community 2006 Highlights £4.2m for Tickled Pink 195k for Everyman 390k raised for Children in Need 69,000 colleague hours in the community £2m raised for local charities through fundraising and bag packing in store

13 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Community  Bags for life  Green goodies for schools  Packaging reduction challenge  Walmart global commitment Wal-Mart CEO Lee Scott Unveils "Sustainability 360" On February 1, Wal-Mart President and CEO Lee Scott unveiled "Sustainability 360" - a company-wide emphasis on sustainability extending beyond Wal-Mart's direct environmental footprint to engage associates, suppliers, communities and customers. The announcement was made during Scott's keynote lecture at the Prince of Wales' Business and the Environment Programme in London

14 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Community: Eat London

15 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Community: Eat London

16 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Agenda  The strategic context  Local sourcing definition  Why it’s important to the customer  Asda & hubs  Our commitment to small suppliers  The future

17 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Why It’s Important To Customers “I think it’s good if you buy local because you know that it hasn’t been freeze-dried or suspended in any way.” “There’s a definite taste difference with local. You can just taste that it’s fresher.” “I like to keep local businesses going where I can.” Support for local economy Perceived freshness & taste benefits Prefer seasonal availability Better for the environment

18 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Why It’s Not Important To Some Customers “It keeps people in a job, but it’s too expensive to buy all the time” “It depends what you call local. I’d always thought fruit and veg was local anyway…because it’s fresh. It can’t really come from far away…can it?” “For locally grown things you’d go to the farm shop, if you were that worried about that”. “If it was the same price I’d buy local but if it’s more I wouldn’t.” Implication of premium pricing Nice to have vs need to have All year round availability vs seasonality

19 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Agenda  The strategic context  Local sourcing definition  Why it’s important to the customer  Asda & hubs  Our commitment to small suppliers  The future

20 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Asda & Hubs: Plumgarth Hub Launch 2002 ‘The Prince of Wales was encouraged by your partnership with Plumgarths in Cumbria. It is a model of how a supermarket can work with local farming communities to make a real and lasting difference and hopes it will be followed by others ‘ Sir Donald Curry ‘I am really pleased to lend my support to the ASDA/Plumgarth initiative and would call on other retailers and producers to follow this lead’ Spring 2006 “Best Business Initiative: Grocer Gold Award for regional hubs 2003 IGD Ian Maclaurin Award for Supply Chain Excellence

21 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Benefits Of Local Hubs  Local expertise  Store & supplier relationships  Food miles  Simpler for suppliers  Simpler for stores

22 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Agenda  The strategic context  Local sourcing definition  Why it’s important to the customer  Asda & hubs  Our commitment to small suppliers  The future

23 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Our Commitment To Small Suppliers  Top level support  Expanding specialist team  Better than standard trading terms  Direct to store or hub  One store at a time  Technical assistance  No costly technology needed  Minimum 12 week promise  Training & information  Marketing & PR support

24 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Agenda  The strategic context  Local sourcing definition  Why it’s important to the customer  Asda & hubs  Our commitment to small suppliers  The future

25 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. The Future: The Customer  Increased demand for personalised offer & convenience  Increased demand for value on food basics  Increased demand for provenance integrity  Increased polarisation in shopping list requirements

26 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. The Future: The Retailer  Race to capture niche to mainstream market share  Choices to be made around strategic range opportunities  Back to the future regional focus  Middle market suppliers under more pressure

27 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. The Future: The Supplier  Choices to make about route to market risks & opportunities  Choices to make about local to regional to national expansion  Requirement for upgraded people skills  Challenge to face as national brands deliver provenance integrity

28 © ASDA COMMERCIAL IN CONFIDENCE: No reproduction, disclosure or other use is permitted without license. Summary  Asda has total commitment to making its local offer work for stores, customers & suppliers  Customers will be relentless in their demands. To make the most of this opportunity, suppliers and retailers must up their game  Suppliers must decide what role they want to play within this process and invest in the necessary resource & infrastructure to deliver


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