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Wal-Mart Stores, Inc. has revealed plans to increase its U.K. business within the next five years, by capitalizing on new growth opportunities and leveraging its worldwide scale, at a meeting last week for the investment community held at British banner Asda’s headquarters in Leeds, West Yorkshire.
“It’s time to open a new chapter in the Asda story, enabling us to become an even better food retailer, a broader nonfood retailer and a leader in e-commerce,” noted Asda president and CEO Andy Bond. “Over the next five years, we have two clear aspirations — to be the market leader in general merchandise and clear No. 2 for food.”
Bond added that lowering prices even further would get customers “to think of Asda as not just a supermarket, but as a much broader, more diverse retailer” that would appeal to all demographics.
“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,” added Walmart EVP and CFO Tom Schoewe.
The banner aims to reach its goal through a combination of maintaining healthy growth in its existing core stores; opening new, smaller supermarkets; the ramped-up introduction of its non-food Asda Living format; and by furthering its online reach online. The George brand will continue to play a pivotal role, with the goal of at least 10 percent of sales coming through george.com by 2013.
“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,” said Bond. “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 opened its 25th Asda Living Friday in Telford, Shropshire. According to Bond: “Asda Living is already a successful business in its own right, compared to rival nonfood 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.”
Further, on the heels of the success of its first dedicated home-shopping picking center in Leeds, Asda’s second such center will open this July in Enfield, North London, an area currently underserved by the retailer.
“Our aim is also to become Britain’s favorite retailer across even more channels,” explained Bond. “That means extending our reach and helping customers order online, pick up in store or let us deliver to their door.
Added Bond, “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.”
Also at the meeting, Asda executives said that the company would acquire International Produce Ltd., which will be led by former Asda food director Nick Scrase. The international food import business already employs more than 1,000 people worldwide.
Bentonville, Ark.-based Wal-Mart Stores, Inc. has more than 8,400 retail units operating under 55 banners in 15 countries. Asda has over 170,000 dedicated associates serving customers from 374 stores, including 24 ASDA Living stores, 23 depots and eight recycling centers across the United Kingdom.