Asda's Private Label is Fastest Growing in the U.K.

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July 7, 2011

Asda CFO Judith McKenna said U.K. consumers are in recession, and like their U.S. counterparts,  have less disposable income and a low sense of job security.

Food retailers across the U.K. continue to see a rise in private label sales, she said, noting that Asda, Walmart’s U.K. division, is seeing the shift as well. In fact, Asda’s store brand "Chosen by You" is the fastest-growing private label in the U.K., she told attendees of Reuters’ Consumer and Retail Summit.

"Do I expect [the economy] to improve anytime soon? No I don't," she said, noting that the company’s income tracker shows people have $22 less disposable income per month in their pockets compared to last year. "It is a really biting effect on how people are shopping and spending....particularly in the area of discretionary spending."

Although the British consumer has felt the worry of recession over the past two years, what has shifted is now they are feeling their spending power cut markedly, she said, topped by inflation and government austerity measures.

"People have changed their shopping habits as well ... they have started to ration their behavior about how they spend and what they spend it on ... there is a new norm developing," McKenna said.

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