Asda

ASDA Stores Limited
	ASDA logo
Company type	Subsidiary of Wal-Mart
Industry	Retail
Founded	Yorkshire, England (1965)
Headquarters	Leeds
Key people	Andy Bond, Chief Executive
Products	Grocery, General merchandise, financial services
Revenue	estimated > £15 billion (not disclosed by parent)
Number of employees	128,000 (2005)
Website	www.asda.co.uk

This article is about the supermarket chain, for other meanings, see ASDA (disambiguation)

ASDA is a chain of supermarkets in the United Kingdom offering food, clothing and general merchandise products. It is a subsidiary of the largest retailer in the world, Wal-Mart, and is currently the second largest chain in the UK, after Tesco. However Tesco has over 30% of the UK grocery market, while ASDA's share is in the mid teens, and as of 2005 the gap is widening.

ASDA is Wal-Mart's largest overseas subsidiary, accounting for almost half of the company's international sales. ASDA's precise turnover is not disclosed, but based on market share it is thought to be in excess of £15 billion. As of May 2005, ASDA had 265 stores and 19 distribution centres, employing 128,000 people. The company is also engaged in property development through its subsidiary company, Gazeley Properties Limited.

ASDA is secretive about financial details and does not make its profit and loss figures public, a situation made possible by its position as a wholly owned division of Walmart.

History

ASDA was founded in 1965 by a group of farmers from Yorkshire. The name is a contraction of Asquith Dairies. The company went through a troubled period in the early 1990s, but was then revived under the leadership of Archie Norman, who later became a front bench Conservative MP. He was chairman of the company during the period 1996–99.

File:ASDA edinburgh store.jpg

ASDA Supercentre store in Edinburgh

ASDA, which then owned 229 stores, was purchased by Wal-Mart of the United States, on July 26, 1999. Following the take over by Wal-Mart, several "Asda–Wal*Mart Supercentres" have been opened, creating some of the largest hypermarkets in the United Kingdom. The first of these stores opened at Cribbs Causeway, near Bristol, in June 2000. At first, it was criticised for its scale and condemned as an eye-sore, but the format has now become extremely popular. In November 2004 a refurbishment of the hypermarket was completed, addressing some of the complaints. In 2005, amid reported concerns within Wal-Mart about a slight slippage in market share, partially due to a resurgent Sainsbury's, ASDA's chief executive, Tony de Nunzio, was replaced by Andy Bond.

In October 2004 ASDA launched a new format called 'Asda Living'. This is the company's first 'general merchandise' store, containing all its non-food ranges including clothing, home electronics, toys, homewares, health and beauty products. The first store with this format opened in Walsall, West Midlands in October 2004, and at the time of writing has been followed by three further stores in Cortonwood (Barnsley), Altrincham and Byker (Newcastle-upon-Tyne). A fifth has now opened in Thurrock, Essex. Tesco is also trialling a similar format, "Homeplus", in Denton, Greater Manchester. Asda has also opened a number of stores containing its George range only in several city centres.

Unlike Tesco and Sainsbury's, ASDA does not operate convenience stores, Tesco has currently taken the lead in this area by the acquisition of such independent retail outlets like Dillons and have revamped the stores into Tesco Extra stores, which now actively compete against high street locations like Kwik Save and other provate independent retailers throughout the UK. Tesco's market share is rapidly increasing and pushing ASDA further and further behind with no realistic possibility of catching up. Tesco has 2,316 stores worldwide, nearly 10 times that of ASDA, recent posted profits were over 2 Billion pounds, ASDA is secretive about financial details and does not make its profit and loss figures public, the only inference that one can draw from this is that their profits at current levels fall far lower than anticipated and it is necessary to keep the impression of lowest price food retailer, at whatever cost.

Marketing

ASDA is known for two famous marketing campaigns. In the "ASDA price" campaign, customers tap their trouser pockets, producing a 'chinking' sound as the coins that (supposedly) Asda's low prices have left in their pockets knock together. In 2004, Sharon Osbourne was selected to be part of a new marketing campaign by ASDA, her last advert was aired in Augist 2005. In the smiley face "rollback" campaign also used in Wal-Mart advertisements, a CGI smiley face bounces from price tag to price tag, knocking them down as customers watch. The focus of these campaigns is to portray ASDA as the most affordable supermarket in the country, a claim that is often refuted by competitors, especially Tesco.

ASDA has been winner of the Grocer Magazine "Lowest Price Supermarket" Award for the past 8 years, and uses this to promote itself across the UK. In August 2005, rival supermarket chain Tesco challenged ASDA's ability to use the claim that it was the cheapest supermarket in the country, by raising a valid complaint to the Advertising Standards Agency. The ASA upheld the complaint 1 and ordered ASDA to stop using it, citing that the Grocer Magazine survey was based on limited and unrepresentative evidence, and that the survey did not study low-cost supermarkets such as Aldi. As a result ASDA no longer cites itself as "Officially Britain's lowest priced supermarket".

It's image has been marred somewhat by the horrific treatment of staff in its stores and distribution centres across the UK, due to the massive loss of operating profit the company is undergoing radical change by closing depots and increasing the workload on its colleagues in order to try and push back towards where it wants to be, it has been stated in a recent news article that the company anticipated that it may take up to two years before it is hitting its targets.

Employee Satisfaction

ASDA often features prominently in lists of "Best companies to work for", appearing in second place in the Times newspaper list for 2005.

In 2005, the company was criticised by some of its employees for the treatment their fellow workers received in both stores and depots across the country. A recent posting on the GMB Union website heralded the attempt to get TESCO to honour some of the 20% Christmas staff discount which ASDA dropped for reasons of 'operational profit protection'. ASDA decided to give the discount in December 2005, but with a maximum spend imposed.

In late 2005 it was revealed in a survey carried out by the company that only 1 in 4 of its staff actually shopped in-store.

Walmart's US operation has come under scathing attack regarding the treatment of its workforce with the release of a movie by a prominent Hollywood producer, Robert Greenwald, which parodies the company's claims that it is an employee friendly, ethically minded company, and works in support of local communities.

Online

ASDA lauched its online retailer service in 1998 but was somewhat more cautious about expanding it than Tesco or Sainsbury's. It uses the store based model rather than servicing internet customers direct from its depots. In May 2005 it announced a major expansion of the service which will increase coverage from 30% of the UK population to 60%.

George Clothing

ASDA has its own range of clothing known as George. This is marketed as quality fashion clothing at affordable prices. Wal-Mart also sells the George brand in Germany, the United States, Canada and South Korea. Recently a trial has begun of a standalone George store on the high street, which is expected to be expanded nationwide if it is a success. The George label is named after George Davies, founder of Next, who went on to set up the Per Una clothing business for Marks & Spencer. +

In 2005, it was announced that ASDA had overtaken Marks & Spencer as the UK's number one clothing retailer by volume of sales. This has recently been contradicted by a poll that puts rival value fashion retailer Primark in the number one slot, with ASDA in third or fourth place.

Awards

2001, 2002, 2003 — Voted a top 10 UK employer by the Sunday Times Top 100 Best Employers Survey
2002 — Nestlé Social Commitment Award, awarded by peers in the food industry

External links