Asda's ambitions on hold as non-food chain falters

Asda's plans to leapfrog Tesco to become the UK's biggest general merchandise retailer appear to be stalling after it admitted that it is set to open only two new Asda Living non-food stores in 2011.

After unveiling just two shops this year, the Walmart-owned supermarket chain now has 25 Asda Living stores, which sell products such as its George clothing brand and homewares.

Its sluggish opening programme is a far cry from the grandiose plans it unveiled in April. Back then, Asda said it wanted to expand its Asda Living chain to 150 shops over the next five years. To reach that target, it will now have to add 125 stores, including the two that are due to open next year, by the spring of 2015.

In April, Asda's chairman, Andy Bond, said: "Over the next five years, we have two clear aspirations – to be the market leader in general merchandise and clear number two for food."

He added: "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."

In fact, Mr Bond said there were "probably 300" locations that could take an Asda Living in 2007.

Robert Clark, the senior partner at Retail Knowledge Bank, said: "I suspect the main issue with the separate non-food stores for the major grocers is probably more to do with property and acquiring the right sites, despite it apparently being a good time to go into them.

"Over the last two years, it has probably proved more difficult in practice than they were expecting."

As well as selling more non-food products in its stores and opening more Asda Living stores, Asda could achieve its aspirations by acquiring a non-food retailer, such as Home Retail Group's Argos and Homebase chains.

An Asda spokesman said: "It remains our long-term aspiration to have a chain of 150 Asda Living stores, but we'll only open them when the market conditions are right."

He added that in the last quarter Asda had introduced non-food initiatives, notably Asda Extra, which allow customers to order goods from in-store terminals or an online catalogue in selected shops. It has also recently launched its "Buy, Play, Trade" scheme in more than 200 stores, whereby customers can trade in their old games for other titles or credit elsewhere in-store.

But Asda is not alone in labouring to introduce standalone non-food stores, which do not benefit from the same huge weekly footfall as food stores.

Tesco opened its first Homeplus non-food store in Manchester in 2005, but so far it has added only 12 more. Mr Clark said: "You could argue that Homeplus is a stillborn for Tesco."

But Tesco said yesterday it remained committed to Homeplus, which it has tweaked over the years by adding Tesco Direct catalogues and Argos-style ordering terminals.

Furthermore, Tesco remains a general merchandise giant, whose global non-food sales rose by 6.2 per cent to £13.1bn (£9bn from the UK and £4.1bn from overseas) in the year to 27 February. Asda does not break out its UK non-food sales, but they are substantially lower than Tesco's.

On Tuesday, Asda said underlying sales rose by 1.3 per cent for the three months to 30 September, its first growth since the final quarter of 2009.

Suggested Topics
PROMOTED VIDEO
Arts and Entertainment
On set of the Secret Cinema's Back to the Future event
filmBut why were Back to the Future screenings cancelled?
News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
Lewis Hamilton walks back to the pit lane with his Mercedes burning in the background
Formula 1
Arts and Entertainment
The new characters were announced yesterday at San Diego Comic Con
comic-con 2014
Sport
Arsenal supporters gather for a recent ‘fan party’ in New Jersey
football
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
No Devotion's Geoff Rickly and Stuart Richardson
musicReview: No Devotion, O2 Academy Islington, London
News
i100
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
News
i100
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

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride