Asda

This article is about the supermarket chain. For the industry group, see Australian Soft Drinks Association.

ASDA Stores Limited

ASDA logo
Company type	Private
Industry	Retail
Founded	Yorkshire, England (1965)
Headquarters	Leeds, England
Key people	Andy Bond, Chief Executive
Products	Grocery, General merchandise, financial services
Revenue	see Walmart
Operating income	£638m
Number of employees	143,125
Parent	Wal-Mart
Website	www.asda.co.uk

ASDA is a chain of supermarkets in the United Kingdom offering food, clothing and general merchandise products. It became a subsidiary of the American retail giant Wal-Mart in 1999, and is currently the second largest chain in the UK after Tesco.

ASDA is Wal-Mart's largest overseas subsidiary, accounting for almost half of the company's international sales. As of January 2006, there were 21 ASDA/Wal-Mart Supercentres, 243 ASDA superstores, 37 ASDA supermarkets (including town centres), five ASDA Living stores, 10 George clothing stores and 24 depots (distribution centres). ASDA has 150,000 employees, who it refers to as "colleagues" (90,000 part-time, 60,000 full-time). The company is also engaged in property development through its subsidiary company, Gazeley Properties Limited.

As a wholly owned division of Wal-Mart, ASDA is not required to declare quarterly or half-yearly earnings. It submits full accounts to Companies House each October.

History

The present ASDA Stores Limited was founded by Laura Beth Murray as Associated Dairies & Farm Stores Ltd in 1949. However the formation of the ASDA name occurred in 1965 with the merger of the Asquith chain of three supermarkets and Associated Dairies; ASDA is an abbreviation of ASquith and DAiries.

For a short time in the 1980s Asda Stores Ltd was a subsidiary of ASDA-MFI plc following a merger between the two companies. Other companies in the group were Associated Dairies Ltd, the furniture retailer MFI and Allied Carpets. After the sale of MFI and Allied Carpets the company name changed to ASDA Group plc. The dairy division was sold to Northern Foods plc, meaning that ASDA today has no connection with the firm its name was derived from.

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.

ASDA, which then owned 229 stores, was purchased by Wal-Mart of the United States, on July 26, 1999.

Since the takeover ASDA has continued to maintain its headquarters at the then newly opened "ASDA House". ASDA House was one of the first of the new large office blocks to open as part of the redevelopment of the huge area south of the River Aire from the city centre of Leeds, in the Holbeck district, West Yorkshire.

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 the same year, Asda expanded into Northern Ireland by purchasing 12 Safeway stores from Wm Morrison Supermarkets plc.

Store formats

ASDA, West Bridgford, Nottingham, England

Following the takeover 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 Patchway, near Bristol, in August 2000. At first, it was criticised for its scale and condemned as an eyesore. In November 2004 a refurbishment of the hypermarket was completed, addressing some of the complaints. There are currently 21 ASDA Wal-Mart Supercentres in the UK.

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. With these stores they have linked up with Compass Group who operate the coffee shop caffe Ritazza within some of the stores. The first store with this format opened in Walsall, West Midlands, and at the time of writing has been followed by seven further stores in Cortonwood (Barnsley), Altrincham, Byker (Newcastle-upon-Tyne), Thurrock, Essex, Glasgow, Leeds Crown Point and at Yorkgate in Belfast. 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.

In April 2006, ASDA launched a new format called ASDA Essentials in a former Co-op store in Northampton, followed by another in Pontefract a month later. This was modelled on the French Leaderprice chain, with a smaller floorplate than ASDA's mainstream stores. Essentials focuses primarily on own-brand products, only stocking branded items that are perceived to be at the "core" of a family's weekly shop. This style of retailing is an attempt to address competition from discount supermarkets such as Aldi, Lidl and Netto. On 6 December 2006 The Guardian newspaper reported that further planned store openings were under review following poor sales in the existing outlets. It was also revealed that the range of branded products has been expanded. In early January 2007 it was announced that the initial trial Essentials store would close within a month after only 10 months of trading.

In 2004, the George clothing brand (see below) was extended to a number of standalone George stores on the high street. 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.

Market share

As of February 2007, Tesco has 31.4% of the UK grocery market while ASDA's share is 16.8%, followed by Sainsbury's at 16.5%, and Morrisons at 11.0%.

It is widely expected, as predicted by former ASDA boss Tony de Nunzio in 2006, that Sainsbury's will reclaim second place at some point in the short to medium term, but this has not happened as yet.

Marketing

ASDA is known for two famous marketing campaigns. In the "ASDA price" campaign, customers tap their trouser pocket twice, producing a 'chinking' sound as the coins that ASDA's low prices have supposedly left in their pockets knock together. In the late 1980s, prior to the reintroduction of the tap pocket campaign, advertising for ASDA had featured the Fairground Attraction song Perfect. In 2004, Sharon Osbourne was selected to be part of a new marketing campaign by ASDA; her last advert was aired in August 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 challenged by competitors, especially Tesco. Currently in ASDA advertising is a theme featuring singing children and the previous tap of the trouser pocket advertising was reduced to a double-tap on a stylised 'A', still producing the 'chinking' sound. This has included an advert during the 2006 FIFA World Cup featuring the England footballer Michael Owen in an advert with the children singing Vindaloo. The latest advertising campaign has done away with the rollback hook in favour of featuring celebrities Victoria Wood and Paul Whitehouse working as ASDA employees.

ASDA has been winner of the Grocer Magazine "Lowest Price Supermarket" Award for the past 9 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 complaining to the Advertising Standards Agency. The ASA upheld the complaint and ordered ASDA to stop using it, citing that the Grocer Magazine survey was based on limited and unrepresentative evidence as it examined the price of just 33 products, 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", instead using "Winner: Britain's lowest price supermarket award".

Expansion Plans

In February 2007, ASDA announced that it will build a minimum of 18 new supermarkets across the UK this year. In addition, it will carry out extensions and improvements to a further 15 stores and roll out the 'ASDA Living' non-food format to a further 10 sites by February 2008. It is claimed that 4,000 new jobs will be created through the expansion programme[4].

Employee relations

ASDA has featured prominently in lists of "Best companies to work for", appearing in second place in the Times newspaper list for 2005. It offers staff a discount of 10% on most items (exceptions include fuel, stamps, lottery, giftcards and tobacco related items)

On "double discount day" in December 2005 , ASDA temporarily increased the staff discount to 20%, but excluded alcoholic drinks from the extra discount for reasons of "operational profit protection". The GMB Union attempted to get Tesco to offer a similar discount to ASDA staff as a publicity stunt, and ASDA subsequently included these products in the extra discount, but with a maximum spend of £100, down from £250 in the years before the alterations. While the reinstatement of the discount was intended to be a publicity stunt that improved colleague relations, it resulted in further bitter feelings. This was due to the fact that in the years previously, music albums, singles, DVDs, videos and videogames had been included in the discount day, but were not reinstated with the rest of the discount after ASDA backed down.

From 2006 ASDA no longer requires job applicants to provide their date of birth, in compliance with new government anti-discrimination requirements.

Trade union relations

In August 2005, the manager of the Wakefield depot read out what were called "foreign-sounding" names over the public address system ordering them to report immediately to the manager's office. The workers, who were all Muslims, were ordered to produce evidence that they were not illegal immigrants. At least one was threatened with the sack unless he produced his passport the next day. The highly public initiative by management, which came within weeks of the 7 July bombings in London, was followed by a spate of graffiti at the depot in Wakefield expressing hatred and contempt for Muslims and their religion.

In February 2006, Asda was fined £850,000 for offering employees of a newly taken over distribution depot a pay rise to give up union rights. An employment tribunal found the American-owned supermarket chain guilty of promising 340 distribution staff a 10 per cent pay rise to give up the collective agreement negotiated by the GMB union – an act which is illegal under a 1992 labour relations law. The court ordered Asda to pay £2,500 to each employee at the County Durham depot.

In June 2006, GMB Union members at the company's UK distribution depots agreed to strike for five days from 30 June 2006. The two sides failed to agree on how many of Asda's 12,500 depot workers belong to the union across its 24 depots around the UK. The GMB claimed the figure as 7,000, but Asda claimed the number was nearer 4,500. The depots affected include Bedford, Chepstow, Dartford, Didcot, Erith, Falkirk, Grangemouth, Ince George in Wigan, Lymedale (in Staffordshire), Lutterworth, Portbury, Skelmersdale, Teesport, Wakefield, and Washington. ASDA threatened legal action, citing flaws in the ballot process, but after discussion at the TUC, an agreement was reached for a national level consultative body and the strike called off.

Online

ASDA launched its online retailer service in 1998, but from the start had over-estimated demand. It began with a dedicated depot based in Croydon, South London, but this was closed with a number of redundancies shortly after as sales were lower than expected. It continued the online service, but emulated the Tesco store-based model instead.

Since the roll-out of the grocery delivery operation ASDA has moved into non-food online retailing. Current categories include entertainment, contact lenses, furniture, travel, electricals, gifts, mobile phones and flowers, with more categories being launched each year.

In May 2004 it announced a major expansion of the service which will increase coverage from 30% of the UK population to 35%. The Grocer magazine reported a turnaround in the fortunes of ASDA's home shopping service under new head of Home Shopping, Richard Ramsden. More recently, ASDA stepped up its commitment to home shopping, focusing on full UK coverage by the end of 2007. Andy Bond highlighted that ASDA will be recruiting up to 1,800 new staff to bolster its operations and focus on competing with Tesco in the online arena.

In January 2007, ASDA lauched www.asda-electricals.co.uk to compete with Tesco's highly successful Tesco Direct. This new venture is part of its online business, with more than 3,000 domestic and home electrical products. ASDA's long term ambition to capture 5% of the £1.9bn market by 2012. Recently, the company sold its Durabrand 1005 DVD player for only 9GBP, the UK's lowest priced DVD player, which sold out in just two days from start of the promotion.

George clothing

File:George logo.gif

ASDA's George brand

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. This George label was named after George Davies, the founder of Next, who was its original chief designer. He is no longer associated with the brand, although it has aimed to remain true to the high quality, low price business model that he established.

In 2005, ASDA stated that the George range was a £1.75 billion business, including sales from Wal-Mart stores in the US and Germany. Mintel estimate that George is the fourth largest retailer of clothing in the United Kingdom, after Marks and Spencer, the Arcadia Group and Next.

Staff at ASDA House, its Leeds headquarters, are asked to take part in what is called 'George Day', a non-uniform day when they must wear at least one item of 'George at Asda' clothing.

ASDA is the first supermarket to stock wedding dresses. Part of the George line, they cost just £60. Adult bridesmaid dresses ranged between £30 and £35, at launch.

Asda's newest addition to the George range is a pet line selling such things as collars, dog bandanas, gems for pet collars and even dog hair clips.

ASDA Smart Price

ASDA Smart Price is a no frills private label trade name of ASDA supermarket in the UK. The range is in many ways the UK equivalent of the generic brands in US stores. Its two main rivals are Tesco's Value and Sainsbury's Basic.

The Smart Price brand can trace its origins to ASDA’s Farm Stores brand launched in the mid 1990s, it consisted of products that were offered at a lower price than the equivalent name brand product and ASDA’s own brand equivalent. The Farm Stores brand originally consisted of a small number of food only products, largely frozen such as frozen chips and a small range of ready meals, this range later expanded to include fresh food. In 2000 following the acquisition of ASDA by the American Supermarket chain Wal-Mart the Farm Stores products were phased out and replaced with the new Smart Price brand "based on Wal-Mart's Great Value and Sam's Choice"

Smart Price products are almost always the lowest price option in a product category in ASDA stores occasionally this difference is only a few pence however in others it is a marked difference for example a box of Smart Price Biological Washing Powder costs 50 pence while the equivalent ASDA brand washing powder costs £1.50 and name brand alternatives cost from two pounds upwards.

The Smart Price label was originally a food only brand, however over the years it has expanded to cover almost every product range in the store. Like early generic products in the US some Smart Price products lack what can be thought of as ‘frills’ in the modern brand name or supermarket own brand, for example the Smart Price Toothpaste has an old fashioned screw cap rather than the now more common flip cap and the Smart Price range of crisps come in traditional clear plastic bags rather than the foil bags common to most name brand versions.

ASDA Financial Services

ASDA has established a financial services division, following in the footsteps of Tesco, Safeway and Waitrose. As with these supermarkets, ASDA simply attaches its own brand to products provided by other companies. Services they offer include insurance (provided by Norwich Union), credit cards (provided by GE Capital Bank) and loans (provided by The Funding Corporation).

Awards

• 2001, 2002, 2003 — Voted a top 10 UK employer by the Sunday Times Top 100 Best Employers Survey, although the merit of ASDA being awarded such an award is contested by the GMB.
• 2002 Nestlé Social Commitment Award, awarded by peers in the food industry

Ethical trading

In 2006, a group of labour rights organisations argued that as part of one of the world's largest companies, ASDA is in a position to influence the fashion industry to ensure higher standards for workers throughout the supply chain. ASDA has signed up to the Ethical Trading Initiative (ETI) which respects workers rights for freedom of association and a living wage. Implementing this initiative is difficult, however, because the concept of a living wage varies between countries and the buying strategies of a major importer like ASDA have an indirect impact on national minimum wages by obliging governments to set them low enough to stop businesses going elsewhere.

See also

• 2007 UK petrol contamination
• Supermarkets in the United Kingdom

External links

• ASDA Corporate Website
• ASDA Finance Website
• AsdaWatch
• Template:PDF