Asda: Difference between revisions

ASDA is a chain of supermarkets in the United Kingdom offering food, clothing and general merchandise products. It became a subsidiary of 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 Smaller/town centres, 5 ASDA Living stores, 10 Georges, and 24 depots (distribution centres). ASDA employs 150,000 "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 isn't required to declare quarterly or half-yearly earnings. It submits full accounts to Companies House each October.

History

ASDA was founded in 1965 by a group of farmers from Yorkshire. The name is a contraction of Associated Dairies. For a short time in the 1980s Asda Stores Ltd was a subsidiary of ASDA-MFI plc follwing a merger between the two companies. Other companies in the group were Associated Dairies Ltd, the furnture retailer MFI and Allied Carpets. After the sale of MFI and Allied the company name changed to ASDA Group plc. The dairy division was sold to Northern Foods plc.

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.

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 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, and at the time of writing has been followed by four further stores in Cortonwood (Barnsley), Altrincham, Byker (Newcastle-upon-Tyne) and 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.

In March 2006, ASDA launched a new format called ASDA Essentials in a former Co-op store in Northampton. With a primary focus on own-brand products on a much smaller floorplate than ASDA's mainstream stores, the Essentials will only stock branded products that are perceived to be at the "core" of a family's weekly shop. This is seen as ASDA's response to the increasing strength of Tesco and Sainsbury in the convenience store sector. If the trial is a success, it will be rolled out nationally.

ASDA is currently expanding its range of services to include Financial Services sold in store and at online. Products currently sold are Car, Home, Travel, Life and Pet Insurance, Child Trust Funds and Credit Cards.

Market Share

Tesco has 31.1% of the UK grocery market while ASDA's share is 16.4%.

In June 2006 a report from TNS suggested that a resurgent Sainsburys - on 16.0% (up from 15.8% in June 2005) was close to overtaking ASDA, but ASDA's warning that it might fall to third place, first made in mid-2005, has yet to be fulfilled.

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 Asda's low prices have supposedly 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 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.

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 complaining 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", instead using "Winner: Britain's lowest price supermarket award".

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 and lottery and tobacco related items) ^{[citation needed]}

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. 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.

On an "extra discount day" in December 2005, ASDA temporarily increased the staff discount to 20%, but excluded beers, wines and spirits ('BWS') 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 BWS in the extra discount, but with a maximum spend of £100.

Unions

Wal-Mart's corporate stance is anti-union, which is refelcted in the stance of Asda. However, taken into account the surveyed high level of staff satisfaction, it is not surprising that Union membership is low - estimated at 1 in 5employees.

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 July 7 bombings in London, was followed by a spate of graffiti at the depot in Wakefield expressing hatred and contempt for Muslims and their religion [2]

In February 2006, Asda were 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 1992 labour relations law. The court ordered Asda to pay £2,500 to each employee at the County Durham depot, but the retailer looks likely to appeal [3]

In June 2006, GMB Union members at the companies UK Distribution depots agreed to strike from 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 [4]. ASDA is currently taking legal action against the strike, citing serious flaws in the voting process which it states, the GMB has ignored.

Cultural status

Perceived to be among the middle tier of supermarket chains in Britain, partly through its focus on low prices, Asda tries to elevate its status with its introduction of the "extra special" range of products which provide higher quality products at higher prices to those who desire it. A typical advertisement for Asda will stress its dedication to low prices, in comparison to (say) Waitrose or Marks & Spencer which will instead focus its message on the quality of their produce. This does not mean that the chain aims solely at the lower price range of shopper, but simply that management choose to place value pricing at the forefront of their marketing strategy.

Online

ASDA launched its online retailer service in 1998, but from the start had over-estimated demand. It started off from a dedicated depot facility based in Croydon (South London) but was closed with a number of redundancies shortly after as sales were not as expected. It continued the online retailer service but copied the Tesco store based model instead. In May 2005 it announced a major expansion of the service which will increase coverage from 30% of the UK population to 45%. Recently "The Grocer" magazine reported an amazing turnaround in the fortunes of ASDA's Home Shopping service under new head of Home Shopping Richard Ramsden.

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. In the mid 2000s the brand was extended to a range 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.

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^[2].

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

Trivia

• 21% of ASDA's "colleagues" are over age 50.
• 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.^[3]

See also

• Supermarkets in the United Kingdom

References

External links

• Company website
• Company financial services website
• Asda Car Insurance Reviews
• George Clothing website