What Will Asda Do Next?

What Will Asda Do Next?

With combined sales of £40bn, it will be the UK’s second-biggest retailer (by sales).

Asda has told suppliers it plans to take the fight to Aldi and Lidl.

Asda launched a new convenience format called Asda on the Move on 18 September 2020. The trial will start at three EG Group petrol station forecourts in the Midlands of England.

Current owner Walmart will keep a minority share in Asda, which will retain its current management under CEO Roger Burnley.

Convenience & Forecourt Retailing

With the brothers’ extensive experience in the forecourt and convenience sector, it would be prudent to surmise that the company will be making significant inroads into the convenience sector in the coming years. NR asked for an interview to find out what the plans for Northern Ireland are, but the request was turned down for now. However the statement from the EG Group explained that under its new owners, the business will support the current management team, maintain competitive pay levels for Asda colleagues, and continue to provide employment opportunities.

Billion Pound Investment

They plan to invest over £1 billion in the next three years in Asda to further strengthen the business and its supply chain, continue to offer low prices across its stores and product categories to ‘ensure Asda remains a price leader in the supermarket fuel sector.’

Their plan is to increase the proportion of UK-based suppliers, increase the volume of products – such as chicken, dairy, wheat and potatoes – purchased from UK suppliers each year, as well as a commitment to source 100% British beef and retain Asda’s industry-leading payment terms for suppliers.

However, with the continued support and involvement of Walmart as an investor and partner, Asda has access to global innovation and buying power. The new owners also pledge to maintain the commitment to its Create Change for Better programme, which helps people living below the poverty line in the UK and supports local communities, among other good causes.

Growth Strategy

Gary Lindsay at investors TDR Capital said: “Asda is a strong and well-managed business with one of the leading brands in UK retail. We are proud to be investing alongside Mohsin and Zuber, who have built EG Group into a global convenience retailer and will now bring that experience to bear at Asda. We look forward to supporting them, and Roger Burnley and the management team at Asda, to build on the business’s inherent strengths and drive long term sustainable growth.”

The transaction is subject to regulatory approvals and is expected to complete in H1 2021.