Asda Ends Price Guarantee Scheme To Fund Price Cuts.

Asda has announced that it is to scrap its long running Asda Price Guarantee scheme (APG) to focus more investment in delivering low prices on everyday lines. The scheme will close on October 3rd.

Used by less than 1% of customers
Launched in 2010, the APG allows shoppers to compare the cost of their shopping at Asda against a comparable basket at Tesco, Sainsbury’s, Morrisons and Waitrose. If Asda is not the cheapest the customer is given a refund voucher for the difference, plus 10%. While the scheme played a pivotal role in supporting Asda’s value positioning when it was launched its importance has diminished over time as the market has changed and discounters have become major competitors. Currently the APG is used by less than 1% of customers, Asda said.
Customers vote with their feet

Explaining the move chief customer officer Andy Murray said “Today’s customers are savvier than ever on the price of their shopping. They have more price information at their fingertip than ever and they vote with their feet if they feel a retailer is off the mark on price. When we asked them what they wanted us to focus on more than anything – the response was clear; invest everything you can in everyday low prices.” He added “It’s a decision we’ve not taken lightly because we love [the APG] dearly, but in reality, we know our customers don’t love it enough for us to keep it.”
More freedom to invest in value

The ending of the APG will give Asda a freer hand to invest in price where it is most effective in driving volume. Over the last 12 months, Asda has invested over £100m on lowering prices on thousands of lines and promises more to come. Already this year Asda has relaunched the Rollback mechanic with the ‘Roll back, staying back” campaign to emphasise its commitment to long term low prices. Asda is also investing more in its own brand offer, conscious that the quality of private brands at discounters is a major attraction for shoppers.
End of the price matching era?

The ending of the APG marks another chapter in the retreat from price matching schemes by major retailers. In July Tesco ended its Brand Guarantee scheme, following on from the closure of Sainsbury’s Brand Match in 2015 and Morrisons Match and More a year earlier. Of the major UK retailers only Waitrose still maintains a price matching scheme.

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