Wal-Mart owned Asda has reached an agreement with Morrison’s to acquire 12 Safeway stores in Northern Ireland. The deal is subject to Office of Fair Trading clearance. The UK’s number-two supermarket has pledged to keep prices in the province as low as in its 279 stores in Great Britain as well as to retain all employees. It also plans to invest £30 million on modernisation and refurbishment and create 250 new jobs.
A statement from the store also outlined its commitment to working with Safeway’s Northern Irish suppliers to ensure continued availability in all converted stores. Asda expects the conversion process to take around three months.
Meanwhile, Asda’s new chief executive has admitted to the UK press that Sainsbury’s could overtake it in UK market share within the next few months.
The admission came from Andy Bond who was reported in the Financial Times saying it could take the UK’s number-two supermarket some 18 months to turn its recent poor trading performance around.
“There is not a short-term fix,” he told the FT. “…I think the rest of the year will be difficult for us. There are things we need to do and I think it will be a 12-18 month timeframe to get back to the place we should be.”
He also fired a warning salvo to competitors on future price cuts: “Asda has built a great business and a great focus on being great value. But our value position needs to improve. We need to lower prices more.”
He admitted that Sainsbury’s could soon overtake Asda given its strong performance on fresh food in the summer. He also said the store needed to raise its game on availability and pricing.
