Asda chief executive Andy Clarke has hit back at Tesco’s vision of the future of big box grocery and revealed that brands will play an increasingly vital role in Asda stores.
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Clarke said Asda had given over space to local communities in stores long before Tesco unveiled its refurbished Watford Extra store last week featuring dedicated community space for activities such as yoga classes.
He said: “I read with interest the launch of a new first with the first community to store launch in Watford.
“I would just like to underpin the importance we place on the community. We see the community at the heart of our business and driving loyalty. In our stores and distribution centres, colleagues generally work in the area so community is important.”
Asda’s own Watford store has community areas which are given over to karate and dance classes while community groups use Asda’s cafes for free.
Tesco’s Watford store has been seen as the blueprint for its large stores with its Giraffe, Harris + Hoole and Euphorium brands used to fill space lost to categories which have migrated online.
Clarke revealed that Asda is to put the emphasis on branded areas in its stores, using own-brands including electricals label Polaroid and toy brand Little Tikes as well as established fashion label George.
Clarke also praised specialists such as McGee’s, the butchers which has a chain of concessions in all of its Northern Irish stores.
Asda executive director property and multichannel Karen Hubbard said the retailer is poised to roll out Disney concessions, of which there are five at present, to more stores.
Asda, which is working with consultancy McKinsey on long-term strategy, is still to formulate its complete vision for the future of the store in a digital age.
Hubbard said inclusion of brands and concessions allows Asda to tailor stores to local communities. “It gives us tools in our armoury to better serve our customers,” she said.
Asda will seek to extend its reach through new stores and a raft of new collection sites for online orders.
The grocer said 47% of UK shoppers do not have access to an Asda store and that convenient collection options represented the retailer’s key focus, rather than building a convenience arm.
Asda will deliberately open fewer stores – representing an additional 369,000 sq ft of new space – this year as it focuses on multichannel development but it aims to up this to 500,000 sq ft next year.
The retailer reported a 0.7% increase in like-for-like sales in the second quarter to July 5. That was a slowdown from 1.3% in the first quarter, which chief financial officer Richard Mayfield attributed to the timing of Easter and a reduction in inflation.
Asda is investing £100m this year in lower prices and said that it is achieving volume growth as shoppers latch on to value. Operating profit rose 7.5% in the quarter.