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Asda To Expand Convenience Format After Successful Pilot

Published on Sep 6 2021 12:14 PM in Retail tagged: Asda / Convenience Store / EG Group / Second Quarter Results

Asda To Expand Convenience Format After Successful Pilot

UK retailer Asda will launch 28 new 'Asda on the Move' convenience stores on EG Group forecourts this year, following the success of a trial project launched in October 2020.

The rollout will begin next month in Knowsley, Crewe, Skelmersdale and Holtspur.

Asda will supply products to these outlets under a wholesale agreement with EG Group, which will own and operate each store.

The company aims to expand to 200 'Asda on the Move' stores by the end of next year and roll out more stores in 2023.

'Significant Opportunities To Drive Innovation'

The new owners of the retail group, Mohsin Issa and Zuber Issa, stated, "Our plans to rollout Asda On the Move will bring Asda to new customers, enabling them to pick up food-to-go, essentials for an evening meal, or treat themselves to premium Extra Special products from a range of convenient locations.

"We continue to see significant opportunities to drive innovation across the business, and we look forward to working with the Asda team to execute our growth strategy."

The 3,000 square-feet 'Asda on the Move' stores offer up to 2,500 products, including a selection of premium 'Extra Special' range and a more extensive range of fresh produce and chilled items than other fuel forecourts.

The outlets will also offer foodservice facilities from EG Group and their partner brands, such as Greggs and Subway.

Chief finance officer at Asda, John Fallon, added, "Looking ahead to the rest of the year, the first phase of the rollout of 'Asda On the Move' is an exciting next step for the business, enabling us to supply a new convenience store offer, complementing our other store formats."

Second-Quarter Performance

The expansion of 'Asda On the Move' was announced as part of Asda's second-quarter investor update for the period from 1 April to 30 June.

In this period, which also coincided with the reopening of non-essential retail and hospitality, Asda saw like-for-like sales decline by 0.7% compared with the same period last year, when sales were boosted by the UK's first national lockdown.

Commenting of the company's performance, Fallon said, "As customers responded to the gradual easing of social distancing restrictions, we inevitably saw sales soften compared to the exceptional lockdown-driven demand experienced during the first quarter.

"Nevertheless, the continued resilience of our business has been demonstrated in the positive like-for-like sales growth compared with the same period in 2019, as we were able to take advantage of a higher level of in-home consumption, satisfying customers' needs across both food and non-food."

Online Sales

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The demand for online groceries eased gradually during the quarter as lockdown restrictions were relaxed and more customers returned to stores.

However, the channel remained a popular choice of customers, with online sales accounting for 17% of total food sales, up from 10% in the second quarter of 2019.

Two-year like-for-like sales growth for the quarter, excluding fuel, saw a 3.1% growth.

Asda's like-for-like clothing and general merchandise sales rose by 1.4% compared to the same period in 2019.

It was driven by the continued strong performance of general merchandise, with like-for-like sales up by 9.6% on a two-year basis as customers continued to invest in their homes and gardens.

Management Changes

Elsewhere, the company also announced that chief operating officer Anthony Hemmerdinger, and strategy officer Preyash Thakrar have both left the business.

In August, chief executive Roger Burnley stepped down ahead of his scheduled departure next year.

KFC executive Meg Farren will step in as the company's new chief customer officer.

Earlier this year, Asda appointed Waitrose's Sam Dickson as the vice-president of own brand and M&S's Carl Dawson as chief information officer.

© 2021 European Supermarket Magazine. Article by Dayeeta Das. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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