Asda has quit the European Marketing Distribution (EMD) buying group after two years as it beefs up efforts to build direct relationships with its suppliers.
The Walmart-owned grocer joined the alliance back in January 2016, but that relationship came to an end at the turn of the year.
EMD said Asda has made “significant changes to its buying model” since joining the group and is now prioritising direct relationships with suppliers.
Asda has also strengthened its international sourcing division, IPL, and enhanced buying ties with US parent company Walmart.
Details of the move emerged days after Roger Burnley took over as chief executive on January 1, replacing former boss Sean Clarke at the helm.
Asda joined EMD under the leadership of Andy Clarke, at a time when like-for-like sales were suffering.
The supermarket giant’s membership of the group formed part of a plan designed to arrest the decline, which also included a £1.5bn price investment and range rationalisations across its stores.
At the time, Clarke said: “Fundamentally changing how we buy products means we can realise significant savings from our cost base and pass these directly to customers through a rebased pricing model.
“Joining forces with the huge EMD network will give us significant economies of scale.”
EMD specialises in private label sourcing and Asda’s membership was widely regarded as an attempt to improve the quality of its own-brand offer.
Enhancing its Extra Special premium range was seen as a particular focus amid stiff competition from Tesco, Sainsbury’s and discount duo Aldi and Lidl.
Asda returned to sales growth in August last year, posting a 1.8% uplift in like-for-likes – its first increase in three years.
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