Asda is gunning to be the UK’s number one retailer in non-food in the next five years, and intends to hit its target by growing online and opening more Living stores.
Asda, which revealed full-year and fourth-quarter results on Thursday, plans to open 150 Living stores in the next three to five years.
The Walmart-owned grocer laid out its plans at a supplier conference and said its George clothing brand was a key driver for its stores. Asda bosses said they would use George to leverage further non-food growth.
Analysts at JP Morgan, who attended the meeting, said the non-food objective “means they would have to double sales in non-food in the next five years”, which it described as “a lofty goal”.
The ambitious target will intensify the rivalry between Asda and Tesco. Tesco has led the way in non-food growth through its Extra hypermarkets, its online operation Tesco Direct and the roll-out of click-and-collect. Asda, however, is catching up with online and Living. Its clothing brand George is also a bigger brand by volume than Tesco clothing.
The offensive comes as Asda bosses conceded the grocer has become “boring” and laid out plans to tackle underperformance, according to JP Morgan. The snow and loyalty promotions by rivals are thought to have hit Asda’s performance.
Asda chief executive Andy Bond maintained the retailer “will do whatever it takes to continue to grow ahead of the market”, JP Morgan said. Asda will focus on smaller stores, online and non-food. It wants to open 100 smaller-format stores in the next three to five years.
The grocer acknowledged the loyalty cards used by Tesco and Sainsbury’s were having an impact. Tesco this week upped the ante by extending its double Clubcard points offer until summer.
Separately, Asda has asked the political parties to take part in live web debates hosted by the grocer before the general election. It argued that politicians must listen to “Asda mums”, who it said reflect the UK.
No comments yet