The godfather of US supermarkets makes a special offer UK shoppers can't refuse

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Allan Leighton is adamant that "it will be the most exciting store in Britain". But some retail experts disagree with the chief executive of Wal-Mart in Europe, saying it is just a load of "hype". Whichever it is, welcome to discount retailing, US-style: over-sized, over-promoted and now over here.

Allan Leighton is adamant that "it will be the most exciting store in Britain". But some retail experts disagree with the chief executive of Wal-Mart in Europe, saying it is just a load of "hype". Whichever it is, welcome to discount retailing, US-style: over-sized, over-promoted and now over here.

What's all the fuss about? It is simply this: Wal-Mart, the American retail giant that took over Asda last year, claimed to be setting a new standard in low prices yesterday when it unveiled its first store in Britain with prices up to 60 per cent cheaper than its high-street rivals.

The first Asda Wal-Mart store opens in Patchway, Bristol on Monday with plans for a further nine within five years. The store's price-list shows headline-grabbing examples on goods like widescreen televisions, pushchairs and Ray-Ban sunglasses. It aims to be 10-15 per cent cheaper than rivals across the board on an average shopping basket, though some offers are on obscure items like quail's eggs, golf balls and an interactive dog.

Wal-Mart's expansion programme comes a year after it acquired Asda for £6.7bn. It is seen as a concerted attack on British retailing's "rip-off" culture and a specific challenge to established retailers such as Boots, B&Q, Dixons and the major supermarkets. "This is an important step that will help Wal-Mart portray itself as the consumers' champion," said Richard Hyman, head of the retail consultants, Verdict. "It is the shape of things to come."

At 93,000 square feet, the Bristol store will be four times the size of the average British supermarket. Similar stores are set to open in Sutton Coldfield, near Birmingham and Havant, Hampshire, in October.

The Bristol store will feature a large consumer electronics section as well as departments specialising in DIY, sports equipment and toys.

It will also feature many Wal-Mart ideas that are commonplace in America. Shoppers will be given a personal welcome by "greeters", and teams of service squad staff will whiz around the vast store on scooters. And the 800 staff are being encouraged to take part in pre-opening motivation sessions in which the store manager leads the workers with an Asda chant starting: "Give me an A. Give me an S," and so on.

This campaign is the latest in a series of price skirmishes in a sector still battling against the "rip-off Britain" campaign. Since the price war provoked by Wal-Mart's takeover of Asda last year, a combination of over-supply, weak consumer demand and competition from new channels, such as the internet, has led to falling prices in areas from clothing to electrical goods.

Retail experts were divided on the potential impact of the new stores. Mr Hyman at Verdict predicted a significant effect. "This is going to have a big impact, though maybe not quite as big as Asda Wal-Mart would have us believe. It will affect sentiment and expectations and consumers will become even more price conscious than they are already."

Clive Vaughan, at Retail Intelligence, was more sceptical. He pointed out that the "new" Bristol store was actually built in the 1970s, first as a Carrefour, then a Gateway, then an Asda. "It's a quarter of a century old," he said.

He was also uncertain as to the potential knock-on effects. "If it was 60 per cent off eggs, milk and baked beans then everyone would have no choice but to respond and that would lead to vicious price war. But quail's eggs are hardly an everyday purchase." He also questioned whether the prices would be sustained or are just a short-term gimmick.

Some experts said Wal-Mart's impact would be limited if it cannot open more of these huge stores. "How many of them are their going to be?" asked one City analyst. "They won't be able to open 50 or 100. They won't get planning permission."

In the City, Wal-Mart's plans caused shares in rival retailers to fall in early stock market trading. Shares in Boots, Dixons and Kingfisher, which owns B&Q, Woolworths and Comet, all fell initially, but most had recovered by the time the market closed.

Rivals said they relished the challenge. Boots said it is used to competition but will not match the prices. "Price is important but so is service. We will continue to offer targeted promotions," it said. Dixons is being more aggressive with special adverts in the local papers offering to knock £10 off any Wal-Mart price on an identical product over £200. "We already beat them on several products. This is all hype," the company said.

The spectre of Wal-Mart's expansion has loomed large over British retailing because of the fearsome reputation for discounting that its huge buying power allows. With sales of £114bn from more than 3,600 stores worldwide, it can secure the best deals from suppliers on everything from beer to nappies. From its US stronghold - it was founded in Arkansas in 1962 by two brothers, Sam and Bud Walton - it has been gradually expanding internationally and also announced plans yesterday to open 50 new hypermarkets in Germany.

Huge scale is at the heart of everything it does: its biggest US stores are up to 250,000 square feet, 10 times the size of an average British supermarket; its computer system, said to rival that of the Pentagon, can replenish stock almost as soon as an item has been taken off a shelf. And it keeps cost low. The company maintains its head office in folksy Bentonville, Arkansas, and works managers hard. Managers meet on Saturday mornings, and even have to empty their own bins to save money.

From a British perspective Wal-Mart can appear to have an almost cult-like approach to personnel management. Staff wear badges bearing legends such as: "Ed: Our People Make the Difference." The company ends staff meetings with the chant: "Who's number one? The customer!"

Bristol has never seen anything like it.

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