Asda may bring Wal-Mart's urban store concept to UK

Wal-Mart is planning a new city centre format in the United States which could provide the blueprint for a UK version to enable Asda to launch a fresh assault on rivals such as Tesco and J Sainsbury.

Wal-Mart, the world's largest retailer, has chosen a location in Dallas, Texas, for the first of a new generation of "urban" discount stores. The store will have two storeys of shopping with parking on the ground floor and escalators leading to the store above.

The concept could be brought to Britain where Asda's stores are almost all out of town. Asda has tried to open smaller, town centre stores in the UK under the Asda Fresh banner, but struggled to make them work.

If Wal-Mart can succeed with city centre Asda stores in the UK it would open up another route of expansion. It would also make bid targets like Safeway more attractive.

A Wal-Mart spokesman said: "We are realising that in many places in the United States people are moving back into the cities. This is part of our policy of getting as close as we can to customers."

The spokesman declined to comment on whether multi-storey "urban" supermarkets might open in the UK.

The new format could give Asda a way of getting round UK planning restrictions which make it increasingly difficult to open large out-of-town supermarkets. Opening town centre stores would enable Asda to attack rivals such as Tesco, which has had great success with its Tesco Metro format, and Sainsbury's, which has its Central store concept for town centres. However, these formats are convenience stores which stock limited food ranges. The "urban Wal-Mart" will stock non-food merchandise as well.

Safeway shares jumped last week on speculation of a bid from the French hypermarket retailer Carrefour. Though Carrefour denied any interest in Safeway, the shares have remained strong.

Wal-Mart, which has 2,780 stores in the United States, tries to adapt stores to available space. "In China we have one underground," the company said.