Wal-Mart owned UK supermarket chain Asda has announced that in the coming year it intends to open a minimum of 25 new stores throughout the UK, six of which will follow the new ‘Asda Essentials’ format. The company said that the expansion would create 7,000 new jobs.
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New stores will be built in various locations during 2006, including Fleetwood, Huntly, Feltham, Newton Abbot, Rushden, Alloa and Hounslow. Stores will be relocated in Ellesmere Port and Rawtenstall, while in Glasgow Asda will open its first non-food store this spring. An additional two George high street clothing stores will also open in Middlesbrough and Southend.
Asda Essentials stores, the first of which will be opened in Northampton in March, are a break away from Asda and parent company Wal-Mart’s standard superstore format in out-of-town locations. They will measure approximately 2,400 square metres, less than a quarter the size of Wal-Mart’s smaller Neighborhood Market grocery stores in the US. Asda Essentials will stock mostly private label products, with a few big brands such as Coca-Cola.
Wal-Mart has stores in 15 countries outside the US and Asda, which Wal-Mart bought in 1999, represents almost half of the international division’s revenue and operating profit. However, profits have been hit of late with decreasing consumer spending and an on-going price war between the major UK supermarkets. Many commentators view the launch of Asda Essentials as an attempt to innovate and boost profits by appealing to the convenience market. Asda is by no means the first supermarket to take this route: Tesco, the UK’s number one supermarket chain, already operates 546 Tesco Express stores.
Plans also include town centre and regeneration schemes, the company said. In Romford, a mixed-use project will combine an Asda store with 229 new apartments. In Hounslow, ASDA will play a part in one of the largest mixed-use regeneration schemes in the UK – The Blenheim centre.
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By GlobalDataJudith McKenna, ASDA’s chief financial officer, said: “Our 2006 store and investment programme further demonstrates our commitment to flexible formats, mixed use and regeneration schemes, enabling us to create an increasing number of jobs across the UK.”
