Welcome to the 81st edition of our Newsletter EdGenie's 📜 Sunday Scroll...

Every Sunday I send out actionable tips, tricks and real-world application insights from my 15 year experience coaching students to achieve As and A*s in their Economics A Levels via EdGenie.

Hey Genies, 👋

I got this exact question from one of you recently:

"This sounds silly, but how am I meant to perfect exam technique if there are gaps in my knowledge?"

Brilliant question.

Here's the truth:

Knowing your Economics content inside out isn’t enough. 🙅‍♂️

Why?

Because the examiner isn’t looking for everything you know.

They're looking for your ability to apply it precisely to the question at hand.

Take this typical exam question as an example:

"Evaluate supply-side policies the UK government can use to boost productivity."

Simply knowing market-based or interventionist supply-side policies won’t get you full marks here.

You have to link them explicitly to productivity.

And not just productivity in general—specifically the UK's lagging productivity growth.

So, what's the solution?

✅ When learning content, always link it immediately to potential exam questions.

✅ Practise structuring and writing answers as soon as you cover a topic—don’t wait for perfect knowledge.

✅ Identify gaps by doing questions FIRST, then revise to fill those gaps.

At EdGenie, we teach you how to master this exact approach:

👉 Precisely how to interpret questions.

👉 How to structure your answers around application and context.

👉 How to turn partial knowledge into full marks.

So if you’re stuck trying to perfect your exam technique because of knowledge gaps, we’ve got your back.

Don't just memorise content—master applying it!

Ready to get rid of those gaps and master your exam technique?

Join EdGenie and let’s make that happen.

Cheers,

Emre

💸 Big Investment Incoming: Asda is planning to invest a “pretty significant war chest” to lower prices and add more staff on shop floors. 🛒

📉 Sales & Market Share Slide: The chain is fighting declining sales and market share, despite food price inflation of over 3% last year. 📊

💰 Profit Will Dip – But On Purpose: Chairman Allan Leighton says it’s an “investment warning, not a profit warning” – profits will drop in the short term to fund long-term growth. 💼

🛍️ Focus on Growing Sales: The goal is to boost profits by increasing sales, not cutting costs alone. 📈

🏪 Store Footprint Still Large: Asda operates over 580 supermarkets, nearly 500 convenience stores, and 769 petrol forecourts across the UK. 🏬

📉 Sales Slightly Down, Profits Up: Sales dropped by about 1% to £21.7bn, but underlying profits (excluding debt) rose 6% to £1.1bn. 💷

🥊 Tough Competition: Asda is under pressure from Tesco, Sainsbury’s, and fast-growing Aldi and Lidl. ⚔️

🧺 Tackling Price & Shelf Issues: Leighton highlights the need to fix pricing, stock gaps, and product range – balancing budget and premium lines. 🧃

🏷️ Everyday Low Prices Return: Asda will bring back its “Asda Price” branding next year, dropping complex promotions. 🛍️

👥 More Staff, More Hours: £43m is being spent to add 5.9 million more working hours to improve customer service in stores. 👨‍👩‍👧‍👦

💻 IT Transition Woes: The switch from Walmart’s systems is delayed, costing over £800m and causing shelf stock issues. 🖥️

🧑‍💼 Job Cuts in Tech: Around 200 roles tied to IT changes are being cut, with more tech job reductions expected later in the year. 🧾

🕰️ Long Road to Recovery: Leighton says it could take up to five years to fully turn Asda around after its £6.8bn buyout in 2021. ⏳

🧑‍🔍 Still No New CEO: The search for a chief executive continues, but Leighton says they’re taking their time to find the right fit. 🧐

 💼 Strong Assets, Big Debts: Asda has £800m in cash and £9bn in assets, with £3.8bn in debt (excluding leases). Some car parks and land are being sold as routine business. 💳

 📉 Debt Burden Hurts Competitiveness: Interest rates are easing, which helps, but £470m in debt repayments last year affected Asda’s ability to compete. 📉

Q. Evaluate whether Asda’s pricing strategy could lead to predatory pricing or limit pricing outcomes in the market.
A. Asda’s everyday low pricing strategy may resemble limit pricing, deterring new entrants like smaller convenience chains by maintaining prices just above marginal cost. However, unless prices fall below average variable cost, it is unlikely to be predatory pricing, which is illegal and unsustainable. Given Asda’s need to protect market share from Aldi and Lidl, the pricing strategy likely aims to signal low-cost efficiency, rather than drive rivals out. Nonetheless, competition authorities may scrutinise intent and outcomes if rivals are significantly weakened.

Q. To what extent does Asda’s strategy help address allocative and productive inefficiency in the supermarket industry?
A. By lowering prices and improving in-store service, Asda may enhance allocative efficiency, bringing prices closer to marginal cost and better matching consumer preferences. Productive efficiency could improve if economies of scale are achieved through increased sales volumes. However, if increased staffing costs outweigh gains, cost structures may rise, reducing overall efficiency. The success of the strategy thus depends on whether productivity gains offset investment costs in the long term.

Q. Assess whether underinvestment in IT infrastructure could be seen as a form of market failure.
A. Underinvestment in IT systems can be seen as a form of productive inefficiency, leading to stock shortages and poor consumer experience. If this results from information failure or misaligned incentives post-ownership change, it could represent a market failure. Moreover, if consumer welfare is significantly reduced due to persistent stock gaps, there’s a potential negative externality affecting broader retail standards. However, since this is a firm-specific issue, it may not constitute a widespread market failure unless industry-wide.

Q. Analyse how Asda’s shift to “everyday low pricing” could affect the price elasticity of demand for its products.
A. Everyday low pricing may reduce perceived price variation, potentially making demand more price inelastic, as consumers become less responsive to individual price changes. However, by promoting price consistency, it could attract more budget-conscious shoppers, increasing elasticity for particular product categories. The overall impact depends on substitutability and brand loyalty—if rivals offer similar value, elasticity could rise despite the pricing shift.

Q. Using a cost and revenue diagram, illustrate and explain the possible impact of price cuts on Asda’s total revenue and profits.
​ ​A. A cost and revenue diagram would show a movement down the demand curve, potentially increasing total revenue if demand is elastic. However, average revenue may fall faster than average cost, squeezing profit margins. In the short term, profits may decline, but if sales volume grows significantly and fixed costs are spread more efficiently, long-run profits could improve. The outcome hinges on cost elasticity and how well additional sales offset the lower price per unit.
​
​Q. Using the kinked demand curve theory, analyse why Asda may be reluctant to increase prices, even during periods of high inflation.
​ ​A. Under kinked demand curve theory, firms in oligopolies expect rivals to ignore price increases but quickly match price cuts, creating a kink in the demand curve and price rigidity. Asda may fear loss of market share if it raises prices while Tesco or Aldi do not follow suit. Hence, it prefers holding prices steady despite inflation, absorbing cost pressures instead of risking consumer defection, which explains reluctance to pass costs on to shoppers.
​
​Q. Evaluate how increased investment in staff and lower prices can be seen as forms of non-price competition in an oligopolistic market.
​ ​A. Improved staffing enhances customer service quality, differentiating Asda’s offering beyond price and building brand loyalty—a key form of non-price competition in oligopolies. Everyday low pricing, though price-based, can also signal value reliability, fostering consumer trust without constant promotions. These strategies help avoid destructive price wars and instead compete on experience and perception. However, rivals may imitate these efforts, reducing their impact unless Asda can maintain a sustainable service advantage.

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