Viewpoint: Bond can save consumers but premium is dead
You dont need a long memory to recall when premium food was the cash cow of the major supermarkets, enabling them to enjoy chunky margins by simply using a more upmarket-looking bit of packaging or a couple of tiny rashers of starry Gloucester Old Spot in a quiche rather than non-celebrity bacon. By Glynn DavisBut the final nail in the coffin of this one-time nice-little-earner was hammered home by Asda chief executive Andy Bond on Tuesday evening as he gave the British Retail Consortium's in augural Annual Retail Lecture in London.
To quote the man: “Businesses had lost sight of delivering honest value and spent time on enhancing margins. It was the fraudulent era of 'premiumisation' where the mantra was to manipulate people into paying up for things with very little added value. Many premium goods offered nothing extra.”
The flogging of organic foods for sky-high margins came in for particularly harsh criticism from Bond who reckons many such products were launched with no other objective than expanding margins. “No wonder the organic industry is on its knees,” he suggests.
Such activity has threatened to take away the trust consumers have in the supermarket industry, which Bond says Asda has continued to fight against by championing shoppers. Asda's organic sales for instance are up 25 per cent year-on-year because it sells them at only a minor premium that equates to a lesser margin than for its core products.
When everybody else around it (including the government, financial sector and some retailers) are conniving to scam the consumer and lying out of their back-teeth Bond says Asda can be trusted. For all embattled consumers let's hope that in contrast to the modern-day financiers his word really is his bond.
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