Asda is cooling on hypermarkets as festive sales tick up

Andy Clarke, the chief executive of Asda, has become the latest grocery boss to signal the days of building huge out-of-town hypermarkets packed with non-food could be drawing to a close.

He made his comments yesterday as the Walmart-owned grocer posted a slowdown in its underlying sales growth over the Christmas quarter.

Mr Clarke said that "acquiring large space is ever more difficult", not just as big stores are harder to find and acquire but also due to "planning constraints".

Asda plans to open 25 stores this year, with a focus on stores sized between 3,000 square feet and 80,000 sq ft. The bulk of its 541 stores are about 40,000 sq ft.

Asda's comments follow those of Tesco's chief executive, Philip Clarke, who, alongside its first profits warning in 20 years last month, in effect put the brakes on it building big hypermarkets, as people increasingly shop online or baulk at driving to stores on the edge of towns.

Concerns have been raised about the grocery "space race" and lower returns on new shops. The big four UK grocers plan to grow space by 19m sq ft, or 21 per cent, between 2011 and 2015, with sales volumes set to rise by just 2.3 per cent.

An Asda spokesman said: "The requirement to have those big out-of-town stores is somewhat negated by the ability to order online and have it delivered to your local shop."

He said the grocer had "no plans" to open any supercentres sized between 80,000 sq ft and 120,000 sq ft this year. But he said: "If the right location became available at the right price I'm sure we'd be interested." Asda has 32 supercentres but the last one it opened was in Ellesmere Port in August 2006.

Mr Clarke said Asda was the "clear winner at Christmas". It was boosted by a focus on lower prices, the 147 Netto stores it has converted, revamped own-label ranges and online sales up nearly 20 per cent in the quarter. Asda grew sales, excluding fuel and VAT, by 1 per cent in the 14 weeks to 7 January but by just 0.1 per cent in the final three months of 2011. This compared with growth of 1.3 per cent in the previous quarter.

Mr Clarke said: "In the autumn, customers were tempted by competitors' promises on price," interpreted to mean Tesco's Big Price Drop, but they returned to Asda in November and December.

According to Kantar Worldpanel, Asda delivered sales up by 8.2 per cent for the 12 weeks to 22 January. This compares with a 5 per cent rise at Sainsbury's, Morrisons' 3.7 per cent growth and just 2.1 per cent at Tesco.

Start your day with The Independent, sign up for daily news emails
News
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Arts and Entertainment
Secrets of JK Rowling's Harry Potter workings have been revealed in a new bibliography
arts + ents
News
Down-to-earth: Winstone isn't one for considering his 'legacy'
people
News
news
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower