What next after superstores and 24-hour opening?
Wednesday 31 December 1997
You don't expect to see supermarket clothes in the fashion pages - let alone clothes from Asda. Yet in the past five years the once poor relation of supermarkets has overtaken Safeway in terms of market value and sales - with its "George" range of clothing leading the re-emergence. The supermarket has even held talks about a merger with Safeway that would leave it as the dominant partner.
Two men are responsible: 43-year-old Archie Norman, the headline-grabbing chairman who went "part time" to become a Tory MP; and Allan Leighton, chief executive.
Asda was a latecomer to supermarket retailing. When Mr Norman took over, many observers thought the company was finished. As a result, Mr Norman has a huge personal stake in it: "I feel the company is part of me, and I am very devoted to it," he has said.
He is now attempting to do for the Tories what he did for Asda. A keen political animal (he was at Cambridge University at the same time as Michael Portillo, was chairman of the Conservative Association in 1975, and is now MP for Tunbridge Wells), Mr Norman has introduced some of his management concepts to the Tory party - as witnessed by the recent "bonding" weekend attended by William Hague.
"I don't believe at all in the classic British boardroom manager style," he has said. "The style of government should be open and politicians should talk to people as people at their level."
Mr Leighton, who now effectively holds the reins at Asda, spent 17 years at Mars before moving through Pedigree Petfoods to Asda, where he became chief executive in September last year.
Between them, the two men have overseen a huge change in management culture. During the first phase, named "renewal" they took to calling the employees "colleagues"; abolished individual offices (even for the chairman); and introduced the wearing of baseball hats for people who didn't want to be disturbed.
After "renewal" came "breakout", now succeeded by "formula for growth". Asda has 216 stores, most of which are bigger than the competition's at around 40,000 sq ft. The next push is for hypermarkets of 60,000 sq ft or so, to display George Davies' "George" brand of clothing to best advantage.
Mike Dennis, food retail analyst at Societe Generale Strauss Turnbull, says that Asda's future lies in building up its "market hall" concept, whereby customers can visit a a delicatessen, pizza place or other "shop" within the store, and feel they are getting a personalised service.
The decision to launch the George clothing range, says Mr Dennis, enables Asda to use its warehouse-sized stores to mark itself out as different. "They're making parts of their in-store offer a unique reason to go that store. If they can get you in on the George label, then you buy everything else there," says Mr Dennis.
"All retailers are trying to find a point of difference, and Asda has a large format store where they can do that with authority."
Asda is now moving into non-traditional supermarket areas, such as CDs and entertainment, as well as piloting 24-hour stores. This Christmas, it went one better and appeared to be expanding into religion. Stores throughout the land broadcast a service led by the Archbishop of Canterbury. From "George" to George Carey? It seems to be working.
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