AsdaBeef & lamb customer insight

•5,000 colleagues (3rd largest NI employer) •Market Share c.17%•19mn UK customers

Asda MissionTo be Britain’s most trusted retailerAsda PurposeSave money. Live better.

EDLC = EDLP

CUSTOMER PLEDGES

Perfect retail storm

Competition – market is polarising

Convenience & Price deflation

Asda Income Tracker

£180

Source: Asda Income Tracker /CEBR

£88

Asda Income Tracker Dashboard: January

Annual percentage changeIndicator

+1.7% Regular earnings growth*

Recent trend

-2.5%Food & non-alcoholic drinks

-16.2%Vehicle fuels

-2.0%Home electricity, gas & fuel

-0.1%Essential item inflation

+9.3%Family spending power

+2.0% Employment growth*

10

Asda Our response

OUR CUSTOMER PROPOSITION - DELIVER VALUE

INVESTING IN MARKET LEADING VALUE

£1bn £250mSimple, compelling,

disruptive

...AND THROUGH THE PRICING PYRAMID

Overall Direction of

Travel

AsdaBeef & lamb Results?

• Asda are growing ahead of the Market in Total Red Meat by 9.3%pts (Asda 6.7%, Market -2.6

RED MEAT SHARE

Source: AC Nielsen Value growth

INVESTING IN FRESH BEEF QUALITY

MATURATION

• 15 days increased to 21 and 28 day maturation to deliver flavour

SPECIFICATION

• Easy carve joints• Steaks

specifications delivering industry leading consistency

PACKAGING

• 1st to market skin packaging in core range

Innovation in packaging and price

SKIN PACKAGING

• Product continues to mature in pack• Flavour and tenderness benefits• Reduced packaging – better for environment• 1st to market on core product for Asda

2 FOR £7 FIXED WEIGHT PROMOTION

• Driving volume sales of steaks• Market leading sales growth

INVESTING IN BEEF ROASTING JOINTS

EASY CARVE SPECIFICATION

• We removed all soft core muscles• Removing waste from our customers plate• Consistency for carving

INNOVATION IN BEEF ROASTING JOINTS

OVENABLE BEEF JOINTS

• Shoppers nervous about cooking Beef Joints

• New innovation (first to market) with ABP where joint in packaging goes straight into the oven

• Consistent, easy, no washing up

• Lower cooking time than standard roasting

• Helping our customers

• Westwood strongest growth in lamb sales YoY up 16.8%• Portadown most growth in red meat up 18.2% driven by beef up

23.8%

INNOVATION AND CONVENIENCE IS DRIVING OUR GROWTH

Continues to mature in packaging

Delivers 2 weeks Shelf life (2

weekends to sell)

Skin Pack Ovenable Lamb 2 for £7

Continues to mature in packaging

Improved shelf life and convenience for

Asda Mums

Replicating success seen in Beef Steaks

offer

Sales growth and reduced waste with new skin packaging

• Asda are growing ahead of the Market in Lamb by 9.9%pts (Asda 2.9%, Market -7.0%).

FRESH LAMB

SHARE

Source: AC Nielsen Value growth

Asda Closer look at customer insight

Our pledges are important to us, tracked quarterly – shoppers perceptions are improving in Meat

Source: Category Perception Tracker Results for AsdaTop 3 Box = Shoppers rating us 8,9 or 10 out of 10

Fresh meat is often the hero of the meal – it needs to meet strict personal quality standards

Source: Nat rep survey. Q20. Thinking about when you usually buy fresh meat, which of the following actors are important to you when deciding what to buy? Q50. To what extent do you agree or disagree with the following statements about fresh meat? Base: Total sample (1,500)

“It’s probably one of the most expensive bits of my shopping,

but you don’t want to scrimp with meat”

“I always get the one from the back, never the front”

“I just can’t stand it when it’s got veins in it – it makes me feel

sick”

“You have to watch what you’re buying with meat sometimes – it

could have all sorts in it”

Shoppers believe fresh meat quality varies between retailers – trust in quality is critical for repeat purchase

Source: Nat rep survey. Q12. You said you buy fresh meat from <<insert retailer>>. Why do you buy fresh meat from here? Base: All who buy fresh meat from each retailer (base sizes vary). Nat rep survey. Q18. To what extent do you agree or disagree with the following statements about shopping for fresh meat? Base: All respondents (1,500).

Promiscuous shopping habits means holding onto shoppers is increasingly important – If shoppers

have a bad personal experience with meat from a particular retailer it can take a long time to regain

that trust

‘Horsegate’ has heightened awareness of quality processes surrounding fresh meat

“You have to watch what you’re buying with meat

sometimes – it could have all sorts in it”

Driving trust in Asda’s fresh meat quality

Driving quality in fresh meat involves shouting about all the quality procedures Asda has in place

Store

Product / Price

Brand / Communications

“You want the store to look nice – it shows that they are taking

care of their meat”

“Aldi is always talking about how good the quality of their products are on their adverts

so I thought I would give them a go”

“Sometimes you need to try something to really know if it’s

good quality – if I try something and it’s not, I wouldn't buy it

again”

Quality perception

Out of store, shoppers need to believe in the brand quality – quality cues in communications

Asda’s brand isn’t instantly associated with quality – prices and promotions

are usually cited as the main reason for shopping at Asda (for all categories)

Prices are important, but combine these messages with quality cues in

communications. •Local

•Quality processes•Butcher’s Selection

If the aisle doesn’t deliver, shoppers will lose trust

Source: Nat rep survey. Q20. Thinking about when you usually buy fresh meat, which of the following actors are important to you when deciding what to buy? Q50. To what extent do you agree or disagree with the following statements about fresh meat? Base: Total sample (1,500)

Determining quality in run

•Neat and tidy displays•Reassurance on quality through

POS•Easily finding what you need

•Well stocked

Tilted shelves –

products hard to seeOut of stock

New POS works well to convey quality throughout the aisle making it feel neater and clearly sectioned

The color black feels more premium and

sophisticated

For some, prices and offers

were felt to stand out more

down the aisle than before

Positive reaction to new POS

“It looks good, feels a bit more sophisticated!”

Shout about awards – shoppers like to hear about them

Source: Nat rep survey. Q12. You said you buy fresh meat from <<insert retailer>>. Why do you buy fresh meat from here? Base: All who buy fresh meat from each retailer (base sizes vary).

“Tha’s really good to know but I had no idea. They

should definitely tell people about it more – why wouldn’t you tell

people about something like that?”

At fixture, products are thoroughly inspected – any discolouration or short dates are avoided

Source: Nat rep survey. Q20. Thinking about when you usually buy fresh meat, which of the following actors are important to you when deciding what to buy? Q50. To what extent do you agree or disagree with the following statements about fresh meat? Base: Total sample (1,500)

Determining quality of product

•Colour / appearance of meat

• Short dates•Provenance•Cut / type•Display

Poor quality products noted everywhere

“You want it to be red – sometimes they’re a bit brown, and you know it’s on the turn”

Browning meat Discoloured Amount of fat

Vac packed packaging is really appealing – allows customers to see enough of the product

60%

Packaging appeal Top 2

58% 48% 28%

Source: Nat rep survey Q23. Looking at the different types of fresh meat packaging shown below, please state how appealing or unappealing you find each one. (Base:1500)

Can see lots of the product

Looks freshLooks good quality

Can see lots of the product

Looks freshLooks good quality

Can see lots of the product

Looks freshLooks good quality

Looks freshLooks good quality

ₓ Can’t see enough of the meat

Save customer time and removes the hassle/worry of cooking

Drives quality perceptions – allows for close inspection of meat and shows

freshness

For shoppers who don’t like to handle fresh meat, poor packaging can be the start of a bad meat experience

Source: Nat rep survey. Q12. You said you buy fresh meat from <<insert retailer>>. Why do you buy fresh meat from here? Base: All who buy fresh meat from each retailer (base sizes vary).

“I mean it just looks awful – what do you do with it? What is

it?”

Unappealing and hard to

identify

Driving trust in Asda’s fresh meat prices

Shoppers aren’t looking for ‘cheap meat’ – they want to feel like they’re getting a great deal on great quality

Source: Nat rep survey. Q20. Thinking about when you usually buy fresh meat, which of the following actors are important to you when deciding what to buy? Q50. To what extent do you agree or disagree with the following statements about fresh meat? Base: Total sample (1,500)

Getting meat from a retailer I perceive to be great quality

Getting the most for my money

Getting a great deal on something I know should be more expensive

Getting added value e.g. Award winning, convenience etc

VFM is...

Help shoppers work out VFM

on pack by highlighting....

Prices

Dates

Promotions

Watch out – on pack information used is functional – prices, dates and portion

sizes.

Quality and brand cues often missed – communicate these using POS,

packaging colour and format

Driving trust in Asda’s fresh meat range

•I like to see and pick it up myself – 37%

•I don’t think the staff would pick the same quality I would - 32%

•I don’t trust the dates will be long enough – 20%

Shoppers are wary of buying fresh meat online because they can’t make their own personal product selections

Why not?

Q11. You said you shop online for your groceries but not your fresh meat. Why do you not buy fresh meat online? (Base:157) Q2C. When buying fresh meat products online, what helps you determine whether the meat is good quality? (Base:704)

“The guy who is picking my meat isn’t going to rifle

through and pick the best one like I would”

2 in 5 Asda online shoppers don’t buy their fresh meat online – in line with the

market

Providing clearer information on where the meat has been sourced may help aid quality perceptions online

“ That information is just too small and not something I would spend

my time reading”

To help determine the quality of a product, online shoppers currently

use:

The cut – 43% Provenance – 42% Type of meat – 34%

Source: Nat rep survey Q11. You said you shop online for your groceries but not your fresh meat. Why do you not buy fresh meat online? (Base:157) Source: Survey with Asda.com meat shoppers Q2C. When buying fresh meat products online, what helps you determine whether the meat is good quality? (Base:704) Q4A. Which of the following is important to see on Asda.com with fresh meat products? (Base:704)

The information is currently too small and often not read by shoppers – make this more

prominent.

32% of Asda.com fresh meat shoppers disagree that it’s easy to judge the quality of

the meat online

AsdaBeef & lamb Thank you