Asda faces legal row with Waitrose after investing £70m in budget range | Asda

Asda is facing a legal row with Waitrose after it unveiled a new £70million cut-price grocery range with a similar name to its more expensive rival’s established discount brand.

Waitrose, which has used the Essential Waitrose brand for around 13 years, said it sent a legal letter to its biggest rival on Monday regarding its new brand name Just Essentials by Asda.

“We were surprised to learn that Asda is launching a range of essentials as the Essential Waitrose brand has been in use since 2009 and has built a solid reputation for value, quality and higher standards of wellbeing during this time. period,” said a spokesman for Waitrose, which is part of the employee-owned John Lewis Partnership.

“As we have also protected the name as a trademark, we have raised this matter with Asda and are awaiting a response.”

Asda, which has been criticized by food campaigner Jack Monroe for shortages of its cheapest items, is launching the cut-price range of 300 items from May after reporting a 42% increase in profits. It will cover household essentials such as toilet paper and shampoo as well as fresh meat, fish and poultry, frozen produce and staples such as canned tomatoes.

The retailer, which said it has raised supermarket prices by around 5% as it battles rising food inflation, said the full range will be available in all of its 581 stores and online and will eventually replace its existing Smart Price budget range.

In its first full year of ownership by petrol station tycoons Mohsin and Zuber Issa, Asda said sales rose just 0.6% to £20.4bn as of December 31, 2021 , but that profits were up 42% to £693.1m, which she said was mostly down. to reduce the costs of the pandemic. The supermarket struggled to beat strong sales in 2020 when families were forced to stock up to cook at home as restaurants, bars, cafes and many work and school canteens were closed during long periods.

Asda said its sales rise for the year was driven by strong trade in homewares, garden kits and clothing after pandemic-related disruptions in 2020. However, the retailer also faces increasing competition fast-growing discounters Aldi and Lidl, which continue to open stores and have stolen Asda’s crown as the cheapest option at many grocery stores.

Asda’s sales were particularly poor during the busy Christmas period, falling 2.9% in the last three months of the year compared to the same period a year earlier. The performance compares with a 0.6% rise in sales at Tesco and strong growth at Aldi and Lidl over a similar period, but is better than rival Sainsbury’s 5.3% drop in sales in the UK. during the Christmas term.

Mohsin Issa said he hoped his new range of cut prices would help Asda overtake Sainsbury’s to reclaim its position as the UK’s second-largest supermarket, behind biggest rival Tesco.

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“We understand that customers are increasingly concerned about the cost of living and want help controlling their grocery bills, while still being able to buy healthy, nutritious food for their families,” he said. he said in a statement.

“Our new ‘Just Essentials’ range has been specifically designed with this in mind, combining our lowest prices with a much wider and more diverse range of great value products to meet all household needs.”

The Issa brothers, who made their fortune building the EG Group petrol station empire, bought a majority stake in Asda in a £6.8billion deal struck last year. US retailer Walmart, which had controlled Asda since 1999, retains a minority stake and a seat on the board.

The Issas opened 31 Asda convenience stores in partnership with EG Group and also injected their foodservice brands, including Leon and Cinnabon, into 17 Asda stores to increase their attractiveness and utilize available space.

About Charles D. Goolsby

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