Asda's ambitions on hold as non-food chain falters - Business News - Business - The Independent

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
News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
Sport
FootballFull debuts don't come much more stylish than those on show here
News
i100
PROMOTED VIDEO
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Travel
travel
News
The ecological reconstruction of Ikrandraco avatar is shown in this illustration courtesy of Chuang Zhao. Scientists on September 11, 2014 announced the discovery of fossils in China of a type of flying reptile called a pterosaur that lived 120 millions years ago and so closely resembled those creatures from the 2009 film, Avatar that they named it after them.
SCIENCE
Life and Style
tech
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Matisse: The Cut-Outs exhibition attracted 562,000 visitors to the Tate Modern from April to September
art
Life and Style
Models walk the runway at the Tom Ford show during London Fashion Week Spring Summer 2015
fashionLondon Fashion Week 2014
News
Kenny G
news
News
peopleThe black actress has claimed police mistook her for a prostitute when she kissed her white husband
Life and Style
techIndian model comes with cricket scores baked in
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

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Training Coordinator / Resource Planner - City, London

£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week