* Investing 100 mln pounds in relaunch focused on quality
* New "Chosen by You" range will have 3,500 products
* Asda's own brands account for 8-9 billion pounds of sales
* Regulatory decision on Netto deal expected this week
(Adds CEO quotes, more detail, background)
By Mark Potter
LONDON, Sept 21 Asda, the British arm of U.S.
retailer Wal-Mart (WMT.N), is spending 100 million pounds ($155
million) relaunching its core own-brand range in a drive to
improve quality and catch up with faster-growing rivals.
Britain's second-biggest grocer said on Tuesday the new
"Chosen by You" range of 3,500 products was based on extensive,
nationwide testing and includes 500 new items such as red pepper
and Wenslydale soup and sticky toffee ice cream.
Asda's own brands account for almost 50 percent of group
sales, or about 8-9 billion pounds, with the core mid-tier range
comprising the vast majority.
Over 1,000 products have been reformulated but prices are
being kept on hold, said Chief Executive Andy Clarke, who
described the move as the largest own-brand relaunch in British
"No other retailer has moved so aggressively to seek not
just the counsel, but the consent of the very people who buy and
eat their products," Clarke told reporters, pointing to over
200,000 individual blind taste tests, involving about 40,000
Britons, and carried out by independent researchers.
"We're sending out a clear message that Asda will now drive
as hard on quality as it does on price," he said.
Asda has lost market share throughout this year to rivals
like J Sainsbury (SBRY.L) and Waitrose [JLP.UL], which have a
reputation for quality and innovation. [ID:nLDE68D0O9]
Asda, which runs 377 stores, has also been held back by
opening fewer new stores than most of its rivals.
That will change following the purchase of 193 stores from
discounter Netto. Britain's consumer affair's watchdog, the
Office of Fair Trading, is expected to rule on the deal this
week, with analysts expecting only a small number of stores
might have to be sold to address competition concerns.
In April, Asda unveiled ambitious plans to become Britain's
biggest non-food retailer within five years, and to step up its
expansion of smaller stores to boost its position as number two
grocer behind Tesco (TSCO.L). [ID:nLDE64H0S5]
An Asda spokesman said the chain expected to expand the
"Chosen by You" range to around 4,000 products early next year.
Clarke was promoted to chief executive in April, having
previously been Asda's chief operating officer.
(Additional reporting by James Davey; Editing by Rhys Jones,