Wal-Mart-owned grocer flexes formats to compete more effectively
Asda plans to open smaller stores of less than 10,000 sq ft (940 sq m) in an effort to gain much-needed scale and put pressure on market leader Tesco.

The Wal-Mart-owned retailer is hunting for sites for grocery-only outlets to see if a small-store model is workable.

Asda has been buoyed by the early performance of the former Safeway stores in Northern Ireland it acquired from Morrisons earlier this year, some of which are almost a third of the size of a typical 40,000 sq ft (3,715 sq m) Asda supermarket.

The first four such stores converted to Asda beat sales targets by 30 per cent in the first week's trading and have given Asda bosses confidence that it can trade successfully out of smaller units.

An Asda spokesman said: 'We want to see if we can make Asda work in a slightly smaller format than we have done in the past.'

Asda has gradually been flexing the size of stores it opens. This year, as part of its biggest expansion programme to date, Asda opened shops ranging from 16,000 sq ft (1,485 sq m) in Northampton and Swansea to the 110,000 sq ft (10,220 sq m) Supercentre in Milton Keynes, due to open on November 19.

Although Asda wants to pilot smaller stores, the spokesman insisted it had no plans to enter the convenience arena, with outlets of 3,000 sq ft (280 sq m) and pit itself against the likes of Tesco Express.

However, the hunt for stores in the region of 10,000 sq ft could see Asda move into urban locations with high customer footfall, as Tesco has done with its Metro format.

Planning constraints have made it difficult for Asda to open as many Supercentres and large supermarkets, where a full general merchandise offer can sit alongside grocery, as it would like.