This week it was revealed that Asda may be considering a bid for Mothercare’s Early Learning Centre as it looks to fill excess space in its stores.

This week it was revealed that Asda may be considering a bid for Mothercare’s Early Learning Centre as it looks to fill excess space in its stores.

Asda wouldn’t be the first supermarket to try this tactic. Just last year, Tesco made headlines after it acquired the family-friendly restaurant chain Giraffe along with Harris+Hoole coffee shops.

Not long afterwards, the supermarket group also disclosed plans to bring yoga classes, gyms and cookery lessons into its stores as part of a revamp.

For Asda, however, a tie-up with the Early Learning Centre would provide benefits that extend far beyond simply filling up space.

It would also develop Asda’s ability to transform its shops into a true ‘retail destination’. By making effective use of their vast real estate space and diversifying their product offerings, retailers such as Asda can provide consumers with a much greater choice – all at one convenient location.

What’s more, by acquiring an already established retailer, Asda would also be able to avoid the high costs and logistical headaches associated with starting a new business from scratch, not to mention the need for specialist knowledge to succeed in an unfamiliar market.

Tesco has already shown why this model works so well. It has managed to make out-of-town shopping less of a chore for consumers and transform it into something like a day out instead. 

Of course, not all retailers have an abundance of excess space to fill. Some businesses, like home furnishings company Dunelm, are planning to acquire more space in order to broaden their current offering, rather than struggling to fill the space they have right now.

Dunelm recently said that it is to speed up its store opening programme, opening 11 stores by the end of the financial year, following its decision to expand its furniture range in-stores.

The strategic decision to invest in destination stores is partly a response to the rise of online retail giants such as Amazon. The convenience of being able to buy everything from CDs to groceries at the touch of a button has left many bricks-and-mortar retailers struggling to remain profitable as more consumers turn to online channels.

There is a clear need for retailers to invest in their real estate space and to diversify their offering so that customers are attracted to their real-world shops.

Whether by acquisition or other means, the race to provide a retail destination to attract shoppers by ‘providing it all’ is clearly gearing up – and the winners will be those who get the offer right.

  • Dan Coen, director, Zolfo Cooper