Asda Unveils UK Expansion Plan

by Talk Business & Politics ([email protected]) 109 views 

Asda Group Plc., Great Britain’s third-largest supermarket chain (which was purchased for $10.8 billion by Wal-Mart Stores Inc. last June), says it will open 12 new stores this year and recruit up to 27,000 new employees over the next five years.

Asda, which announced the expansion plans Jan. 10, has spurred a price war in the United Kingdom by promising to reduce its prices by 5 percent to 10 percent, down to U.S. levels.

With the price cuts, Asda is trying to unseat Tusk Plc. and J Sainsbury Plc. from their positions as No. 1 and No. 2 respectively in UK sales.

Under Wal-Mart, Asda has become much more flexible, attacking market share from all angles with new stores ranging from Asda Fresh at 25,000 SF up to Supercenters at an unprecedented large size of 90,000 SF for Great Britain where real estate is exorbitantly expensive.

Analysts have been awaiting Wal-Mart’s next move, convinced that Asda is at the heart of the U.S. retailer’s expansion into Europe.

Asda said about 6,000 people will be recruited within the next 12 months with up to 1,500 jobs created immediately as the supermarket chain offers temporary Christmas staff permanent positions. Asda already employs 100,000 people.

The new store openings will include two supercenters and the expansion of six existing stores.

Wal-Mart currently has 232 Asda stores in the United Kingdom and 95 stores in Germany that were purchased in 1997. Analysts believe Wal-Mart is now looking to gain a foothold in France.