“That’s all very well and good,” say the analysts who stoically watched the announcement of UK retailer Asda‘s largest-ever development programme, “but when will they actually get on and do something?”
The British subsidiary of US giant Wal-Mart since August 1999, Asda’s investment plans left market watchers cold yesterday (3 January). Paul Smiddy, from Credit Lyonnais, commented that the £450m was “not an awful lot of money” and others argued that the announcement merely reiterated the investment programme spelt out many times before. There is no “major change in strategy,” remarked one analyst. “It’s just to remind people that they’re still out there.”
“Management did a fantastic job of turning the business around from where it was four, five years ago. But now they over claim and under deliver,” added Smiddy.
Asda’s promise of 5,000 new jobs, nine store openings, two redesigns and two re-sitings, is welcomed in Britain, but Smiddy argues of the announcement: “They don’t do themselves any favours with this type of hyperbole.” Certainly, compared to UK supermarket group Sainsbury’s proposed investment of £950m in store development, the Asda figure becomes less than grand.
Asda currently operates 241 outlets across the UK, and employs above 105,000 people. With the expansion of its home shopping venture, it also promised to hire 2,500 more staff support members. Currently, and rather contentiously, rating second in the largest UK supermarket polls, Asda must still pull out the stops if it wants to impress the analysts.