Supermarkets are having a bit of a tricky time in the UK of late, with growing competition from budget rivals and a rising consumer preference for convenience stores forcing the nation’s top chains to somewhat change their game plans. The emphasis is now very much upon cutting costs on everything from groceries to clothing lines in the hope of retaining market share.
However, the latest news from Asda defies this recent trend as it has announced a five year strategy which will keep the retailer busy in the commercial property market, while creating jobs in the south of England.
Under the plans, Asda will seek to acquire 40 new large-scale superstores, 100 new traditional supermarkets and 150 forecourt shops in a region where it trails key rivals such as Tesco and Sainsbury’s in terms of market penetration. It will also turn a greater level of attention to the rapidly growing online market, opening 1,000 new click and collect points nationwide.
As a result of this growth, Asda – which currently employs around 172,000 workers in the UK alone – expects in the region of 12,000 jobs to be created. However, BBC business editor Kamal Ahmed believes this figure is a “cautious estimate and could be higher”, continuing; “This is the first time Asda has put a jobs number on its five year strategy.”
Of course, while this news is excellent for employment statistics in the UK, store growth will not automatically equate to success in the competitive supermarket sector – as chains such as Tesco have found to their cost. Cheaper foreign import food retailers such as Aldi and Lidl have experienced a boom in sales after becoming firm favourites with the “Maidstone Mum”, while the top end of the grocery market has been firmly cornered by Waitrose; a brand hugely popular in the South East.
Asda’s intention to focus on online growth certainly seems like the strongest aspect of the five year strategy, as services such as home delivery and click and collect continue to grow in profile with consumers. Yet chief executive Andy Clarke remains confident that the planned expansion of the store portfolio will also pay off in the long term.
He says; “What a great time to expand – the economy is recovering and we are doing well.
“We have been focusing on the discount, and the premium, market for some time.”
With Prime Minister David Cameron expressing his support for the jobs creation outlined in the strategy, Asda will be hoping that this plan works. Otherwise, it could see itself following “Tesco Towns” into a downward spiral in terms of market share.
Do you think the economic situation now makes it safe for retailers to concentrate on increased store numbers, or should online presence be the primary focus?
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