Asda was on course to become a dominant force in games, with increased shelf space and aggressive price promotions. But that was before its distributor EUK collapsed. Christopher Dring speaks to category boss Duncan Cross about the supermarket’s revitalised bid to become the UK’s biggest non-specialist retailer…
Asda was enjoying a great year last year in games, but then your supplier EUK went under. How did this affect you?
It was a good year, set to be a great year, but EUK gave us a load of new challenges. It didn’t come as a complete surprise, and we were working on a contingency plan – although having it happen in late November inevitably gave us big challenges. But our team responded in true Asda style.
We set up our contingency plan in a matter of days, while it has taken other retailers 18 months. We set up our own distribution network, and our own supply chain team, and extended the trading team. Turning around from having no supply chain to getting product on shelves in ten days was remarkable considering it was early December.
Now that we have come out of the first quarter, it is clear we have our direct trading model, and we are the only grocer to successfully deliver that. But there’s a lot more to do, lots more to learn as we go, and we are working with partners to continue this growth.
How is the direct trading model suiting you? Have you had to expand your team?
The biggest difficulty has been how products flow through the chain and hit the shop floor.
We have had to rapidly expand our team; we now have around 14 heads on the games section, which has grown from four. That’s not just in the core buying team – we now have a new supply team, new distribution team, and a new merchandise planning function. So bringing all those teams together internally has been challenging, but it is starting to pay dividends.
The other challenge is starting those direct relationships with suppliers, which I see more as a great opportunity to get closer to publishers. We now no longer have a middle man, so we can really trade aggressively, strike deals and grow products by giving great value to our customers.
EUK’s closure also saw some of the distributor’s top personnel join some of your rivals, including Tesco and Sainsbury’s. What do you make of your rivals’ recent push into the games sector?
It is no surprise that retailers, regardless of whether they are in the grocery sector, are increasing their games presence. Every retailer is seeing games as the growth engine. Look at the amount of marketing investment retailers are spending to go after games, be it John Lewis, GAME, Tesco, through to Asda – everyone is trying to get their piece of the pie. It makes it a highly competitive industry, which does bring its challenges, but ‘bring it on’ is our message.
Also, it is no surprise that so many talented individuals from EUK have found themselves at other retailers. We ourselves are really pleased to have brought in some representation from EUK, and the wider team within Asda has had a number of recruits from Gamestation up in York. So we have a good mix of Asda people, ex-EUK people and some industry experience from Gamestation.
How significant do you feel supermarkets like yourself can be to the growth of the games industry?
There is no doubt with the huge footfalls supermarkets experience that they can play a significant role in growing the games category. We have been in the games industry for the best part of a decade, and we are here for the long-term, and we are here to grow the market. You only have to think about the customers coming into Asda, Sainsbury's, Tesco and Morrisons – we appeal to the mass market.
The growth in digital over the past few months has been rapid – with talks of a digital-only PSP and Amazon selling Xbox Live Arcade games. What do you make of these latest developments?
Right now it is not our priority, but we are obviously keeping an eye on the digital market. We need to make sure we are reacting as quickly as possible within the confines of a supermarket retailer. It is something we need to be aware of, but it’s not something we’re planning a radical overhaul of, at least in the next year or so.
How far is Asda off from being the ‘largest non-specialist games retailer?’
That still remains our goal to be there for 2010. This year is our year. Asda is enjoying a phenomenal time, and games is benefiting from that improved footfall. We need to focus on getting our in-store execution right, and the fact we were up for MCV Awards is very pleasing. But bringing new people in brings new ideas, and we want to stay ahead of the market. It is an exciting journey, but there is a lot to improve on. Selling consoles is going to be one of our key fundamentals. We have a good heritage in software, so cracking the hardware market is our next challenge.
MEET THE TEAM
Alongside a new distribution, supply and merchandise team, Asda’s games buying team has also expanded since the fall of EUK.
“In the trading team there are now five buyers,” explains Asda’s games buying manager Duncan Cross.
“We have John Taylor who has joined from EUK, we have Laura Lister who has risen through the ranks and is now our accessories buyer.
“We have James Yelland who manages Nintendo and Activision, Andy McFie looks after Sony, Sega, EA and Ubisoft. And we have got Alistair Islip who has also joined from EUK and he looks after Disney, Microsoft, Konami and THQ.”
“We’ve got a nice mix of EUK and Asda people here now. We have also brought in a new trading assistant called Ben Encell, who supports that team. We have also got a games marketing manager.
“We’ve never had that before, and we brought in Laura Pritchard who has previous experience at Tesco and Marks and Spencers. We are really chuffed to get her on board.”