Asda, battling to hang on to its hard-earned position as the UK’s number two supermarket, has announced plans to open a chain of discount neighbourhood stores.
The new Asda stores, which are as yet unnamed, will be direct competition for Tesco’s Express and Sainsbury’s Local convenience stores; a format that Bond concedes Asda has been slow to embrace.
They will stock a limited range, mainly of own-brand goods, and store managers will have the power to adjust pricing to ensure they are the “cheapest shops in town”. The chain will achieve this by asking suppliers for better deals and keeping a tight rein on costs, one article in The Times stated.
In a number of press reports, chief executive Andy Bond revealed Asda has been failing operationally. He said the price differential is not wide enough between the supermarket and its competitors.
Many speculate that Sainsbury’s, which stands as the UK’s third largest supermarket, could overtake Asda early next year, and Bond has made public his own belief that this could well be the case.
Despite tapping into the convenience sector in a bid to revive business, Bond said it could take up to two years to revive Asda’s fortunes.
The first Asda convenience outlet is scheduled to open in Northampton next month.
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