ASDA Wal-Mart: Products and Projects

Stores

Asda has three types of store: 1. Standard, with an average selling space of 42,000 sq ft. 2. Asda-Wal-Mart supercentres, which have been developed/renewed since the merger. 3. Asda Fresh stores which focus on a fresh food range.

Sixty percent of Asda’s sales are currently in grocery items, although it intends to build on the growth of non-food products in store, which may well change this balance. Asda sells six own-brand labels: Asda Smartprice, Asda, Good for You!, Asda Organic, Asda Extra Special and More for Kids.

Non-food is the fastest growing area of supermarket retail, with a 15% year on year growth.[1]

The George fashion range was launched in 1990 by George Davis, founder of the Next chain of high street stores. From five outlets, the label has grown into a £1 billion business. Asda has now overtaken Marks and Spencer as the UK's biggest clothing retailer.[2]

Asda already operates five George-only stores. In autumn 2004 the company will open a pilot store selling non-food products only in Walsall. The store will be called Asda Living and will sell all the non-food products available in Asda's largest stores.[3]

Many stores also have petrol stations; Asda is very proud of the low cost of its petrol.

Asda's speciality businesses division includes pharmacies, opticians, jewellery and photo departments. Asda acquired an in-house pharmacy through buying Moss Pharmacies from Alliance UniChem for £100m in 2000. In 2004 Asda operated 83 instore pharmacies, and estimates it can open another 80 in the next five years as licensing laws have recently been changed. The new rules have been criticised for their potentially damaging effects on community and hospital pharmacies.[4]

Many Asda stores now have opticians, who provide 'free NHS eye tests for those who are eligible'. In 2002 Asda also started offering flu jabs at lower rates than GPs.[5]

Asda has plans to open 20 Supercentres before the end of 2004. 'We aim to open at least 10-12 new stores per year and we hope to create in excess of half a million square feet of new retail floor space per annum for the foreseeable future'.[6]

According to an article on www.sprawl-busters.com/caseagainstsprawl.html: 'When Wal-Mart says 'one stop shopping', you should read that statement very literally. These big corporations want to be the ONLY place you and I shop. It's the Tennessee Ernie Ford theory of retailing: “You will owe your soul to the Company store.”' In this light, it is perhaps worth feeling a little bit paranoid when Asda announces that it is planning to introduce in-store priests – as 'part of our efforts to provide the local community with a one-stop shop.'[7]

Media

In September 2004 Asda started a trial of instore digital TV which will broadcast advertisements from Asda and various suppliers. The trials are taking place in its stores in Wembley and York. Suppliers, each of whom have an exclusive deal on the catergory they are in, include Nestle, Coca-Cola and Proctor + Gamble. The trial is being run by Market Forward, part of media agency Publicis which manages Asda’s media centre.[8]

Asda is not alone in this development: Tesco, Sainsbury and Spar have all dabbled. Apparently research has shown that the majority of buying decisions are made instore, and the more channels there are the less effective normal TV advertising becomes. According to one commentator: ‘New ideas like Tesco TV and Asda FM are logical extensions of customer magazines.’[9]

Procter & Gamble’s director of customer business development, Gary Coombe, says: “Shopper marketing media is becoming more and more important and we do see retailers as the emerging media owners. The reality is that in store environments you have the opportunity to talk to consumers.”[10]

Asda's media centre, which is based near its head office in Leeds, is described as: 'an independent body sitting between Asda and media owners, providing objective advice.'[11]

Asda planned to cover 60% of the UK internet grocery market by 2003 through asda@home. However, Asda's internet plans have never gone quite as intended. It first talked of e-commerce in June 1999, but was slow to develop anything on a comparable scale to Tesco. Its first project, ‘Captain Value Mad’ (valuemad.com), was ditched after less than a year, when the company realised it was damaging its brand, Value Mad has since been rolled into ShopSmart, in which Asda recently took a strategic stake. Through a joint venture with America Online they distribute disks for internet service provider AOL (renamed for the UK market to avoid the word 'America').

Housing

According to a report on the Grocer in September 2004: 'Supermarkets are planning to make strong moves into the housing market as a response to increasing pressure from local councils for the inclusion of social housing as part of redevelopment schemes.'

Asda, Tesco and Sainsburys are all said to be planning housing schemes including 'affordable' housing in return for planning permission for new stores. Asda has invested £30 million into a 'waterside scheme' in Poole in Dorset, including a 58000 square foot store, 64 social housing flats and 98 'waterside apartments' – which will presumably not be so affordable.[12]

References

1 http://www.grocertoday.co.uk/gra_article.aspx?articleid=75849&wordstohighlight=asda 2 http://www.guardian.co.uk/business/story/0,,1288594,00.html 3 http://www.grocertoday.co.uk/gra_article.aspx?articleid=75218&wordstohighlight=asda 4 http://www.grocertoday.co.uk/gra_article.aspx?articleid=75623&wordstohighlight=asda 5 www.asda.co.uk, click on 'customer service' then 'optical information'; also www.just-food.com/news_detail.asp?art=51817, www.just-food.com/news_detail.asp?art=52164 6 www.asda.co.uk/ 7 Daily Record, 13/6/02 8 http://www.grocertoday.co.uk/gra_article.aspx?articleid=76031&wordstohighlight=asda 9 http://www.grocertoday.co.uk/gra_article.aspx?articleid=76058&wordstohighlight=asda 10 Ibid. 11 Ibid., http://www.thegrocer.co.uk/gra_article.aspx?articleid=76059&wordstohighlight=asda+publicis+digital 12 http://www.grocertoday.co.uk/grt_article.aspx?articleid=76480, http://business.timesonline.co.uk/article/0,,8209-1281444,00.html