Walmart’s Asda outlines food expansion plans

Posted by Josette Dunn on 16th April 2010

* Asda aspires to be market leader in non-food, and clear #2 in food within five years
* Chain of 100 Asda supermarkets (smaller food stores) and 150 Asda Living (non-food stores) planned
* UK-wide rollout of its ‘Order Online, Collect in Store’ service completed
* Asda to use global merchandising centers to further leverage Walmart’s global scale
* Location of second Asda dedicated home shopping picking center unveiled in North London

Supermarket aisle - shopping trolley

Wal-Mart outlined a number of ambitious plans to grow its U.K. operations within the next five years, by taking advantage of new growth opportunities and leveraging its global scale yesterday at a meeting for the investment community held at Asda’s Home Office.

“It’s time to open a new chapter in the Asda story, enabling us to become an even better food retailer; a broader non-food retailer; and a leader in e-commerce. Over the next five years, we have two clear aspirations-to be the market leader in general merchandise and clear number two for food,” said Andy Bond, Asda President and CEO.

“By leveraging Walmart’s global scale, our aim is to lower prices even more for our customers,” Bond said. “As a result of our plans, in the future I want people to think of Asda as not just a supermarket, but as a much broader, more diverse retailer, that enables customers wherever they live, or however they want to shop, to access our low prices and extensive range.”

“Walmart’s international operations represent the fastest growing segment of our business, and Asda plays a key role in delivering on our three financial priorities of growth, leverage and returns,” said Tom Schoewe, executive vice president and chief financial officer of Walmart. “Our strong Asda leadership team is working even harder to leverage our global scale and best practices to win locally, not only to drive shareholder returns, but also to help our UK customers save money and live better.”

Asda plans to achieve its aim through a combination of maintaining healthy growth in its existing core stores, opening new, smaller supermarkets, the accelerated rollout of its non-food Asda Living format, and by extending its reach online. The George brand will continue to play a central role, with the goal of at least 10 percent of sales coming via by 2013.

Bond, alongside other members of the Asda Executive team who were addressing a global audience of analysts and investors, outlined how Asda has deliberately taken its time to get its format strategy right, and it is now ready to accelerate its store opening program.

“With our new format strategy, our aspiration is to have a chain of 100 smaller Asda supermarkets, helping us reach customers who find it difficult getting to one of our larger stores, and 150 Asda Livings,” Bond said. “Our small stores are proving popular with customers, as they can complete a full weekly shop, while still taking advantage of our market leading low prices.”

Asda will open its 25th Asda Living today (April 16th) in Telford, Shropshire. Bond added: “Asda Living is already a successful business in its own right, compared to rival non-food businesses on the high street, and we plan to shift up a gear. We’ve taken our time to get the model right, and wait for the market conditions to be favorable. We’re now ready to accelerate our opening program.”

Following the success of its first dedicated home shopping picking center in Leeds, West Yorkshire, Asda unveiled the location of its second center, which will open in July 2010. Based in Enfield, North London, the center is located in an area currently underserved by Asda stores.

“Our aim is also to become Britain’s favorite retailer across even more channels. That means extending our reach and helping customers order online, pick up in store or let us deliver to their door,” Bond said. “Our order online, collect in store service is already available nationwide, and our take home today trial in Bradford is performing well and is set to be extended to more stores later this year.

“All of our businesses are supported by a world-class customer engagement program that is taking advantage of the rise in social media to enable us to get even closer to our customers.”

During the meeting, Asda executives also unveiled how the company plans to leverage Walmart’s global scale, including the acquisition of International Produce Limited. Former Asda food director Nick Scrase has been appointed to head up the international food import business, which already employs more than 1,000 people across the world.

“Thanks to Walmart, we have a unique opportunity to remove middle men from the global supply chain to lower costs,” Bond said. “We believe that the creation of global merchandising centers, be that in food, non-food or apparel, will enable us to save our customers money.”