Asda

For other uses, see Asda (disambiguation).
Asda Stores Ltd.
Private company subsidiary
Industry Retail
Founded 19 February 1949[1]
Headquarters Asda House, Leeds, West Yorkshire, United Kingdom
Number of locations
 568[2]
Key people
 Andy Clarke
(President & CEO)
Alex Russo
(CFO)
Hayley Tatum
(Executive People Director)
Mark Ibbotson
(Retail Director)
Products Grocery, general merchandise, financial services
Revenue see Walmart
£1 billion
Number of employees
 175,000
Parent Corinth Investment Services of Leeds Limited (owned by Walmart)
Website www.asda.co.uk
A bust of founder Peter Asquith outside Asda House in Leeds

Asda Stores Ltd. (stylised as ASDA) is a British-based, American-owned supermarket chain which retails food, clothing, general merchandise, toys and financial services. It also has a mobile phone network (via the EE network as of 25 November 2013), Asda Mobile. Its head office is at Asda House in Leeds, West Yorkshire.[3]

In July 1999, Asda became a subsidiary of the American retail company Walmart, and today is the United Kingdom's second-largest chain by market share.[4] Asda's marketing promotions are usually based solely on price, with Asda promoting itself under the slogan Saving you money, everyday.[5] As a wholly owned division of Walmart, Asda is not required to declare quarterly or half-yearly earnings. It submits full accounts to Companies House each November.

History

Asda trace their history back to the 1920s when a group of Yorkshire dairy farmers formed Hindell's Dairy Farmers Ltd.[6] After a series of acquisitions, the name was changed to Associated Dairies & Farm Stores Limited in 1949 in Leeds. The adoption of the Asda name occurred in 1965 with the merger of the Asquith chain of three supermarkets and Associated Dairies; Asda is an abbreviation of Asquith and Dairies, often capitalised.[7]

Asda took advantage of the abolition of retail price maintenance in order to offer large-scale, low-cost supermarkets, aided by the takeover of the GEM retail, including the first out-of-town store in West Bridgford in November 1964.[8] Asda increased GEM's £6,000 per week sales to around £60,000 per week in just six months with the new stores named ASDA Queens Supermarkets.[8][9]

For a short time in the 1980s, Asda Stores Ltd was a subsidiary of Asda-MFI plc following a merger between the two companies. Other companies in the group were Associated Dairies Limited, the furniture retailer MFI and Allied Carpets. After the sale of MFI and Allied Carpets, the company name changed to Asda Group plc. The dairy division was sold in a management buyout and renamed Associated Fresh Foods,[10] meaning that Asda has since had no connection with any of the firms from which its name was derived.

With stores mainly based in the North of England, the newly focused food retail group expanded further south in 1989 by buying the large format stores of rival Gateway Superstores for £705 million. This move overstretched the company and it found itself in trouble trying to sell too many different products.[11] As a result it was forced to raise money from shareholders in both 1991 and 1993. It revived under the leadership of Archie Norman, who later became a front bench Conservative MP. CEO from 1991, Norman was chairman of the company during the period 1996–99, and remodelled the store along the lines of the world's largest retailer,[12] America's Walmart, sending protégé Allan Leighton to Bentonville in the north-west of Arkansas to assess and photograph the systems and marketing which Walmart had deployed.[13]

When Norman left the company to pursue his political career, he was replaced by Leighton. Walmart wanted to enter the UK market so CEO Bob Martin lobbied British Prime Minister Tony Blair on planning issues.[14] Asda, which at the time owned 229 stores, was purchased by Walmart on 26 July 1999 for £6.7 billion, trumping a rival bid from Kingfisher plc.[15]

Following the takeover, Asda moved its headquarters to the then newly opened "Asda House". This building was one of the first of the new large office blocks to open as part of the redevelopment of the huge area south of the River Aire in Leeds city centre, in the Holbeck district, West Yorkshire.

In 2005, amid reported concerns within Walmart about a slippage in market share, partially due to a resurgent Sainsbury's, Asda's chief executive, Tony De Nunzio left, and was replaced by Andy Bond. In 2005, Asda expanded into Northern Ireland by purchasing 12 former Safeway stores from Morrisons.[16][17]

In November 2008, there were reports that Asda was to buy Irish retailer Dunnes Stores.[18]

In 2009, Walmart 'sold' Asda for £6.9 billion to their Leeds-based investment subsidiary Corinth Services Limited.[19] The deal, which took place in August, was described as part of a “group restructuring” and means Asda remains under the control of Walmart, since Corinth are themselves a subsidiary of Walmart.[20]

On 11 May 2010, Andy Clarke, a former manager of an Asda store, who was also the chief operating officer, was appointed as chief executive officer.[21]

In May 2010, Asda bought all of Netto's UK operations in a £778 million deal. The deal provided the company with smaller, more localised stores, with most Netto stores being only one fifth the size of the average Asda supermarket. In September 2010 Asda was required to sell 47 of the existing 194 Netto stores following a ruling by the Office of Fair Trading. The rebranding of Netto stores to Asda began in early 2011.[22]

In February 2011, Asda announced the purchase of six stores from Focus DIY, which were converted into supermarkets later that year.[23]

Marketing

In the "Asda price" campaign,[24] customers tap their trouser pocket twice, producing a 'chinking' sound as the coins that Asda's low prices have supposedly left in their pockets knock together. The pocket tap ads were launched in 1977 and over the next 30 years a range of celebrities have been "tappers", including Julie Walters, Michael Owen and sitcom actor Leonard Rossiter.[25] In 1980 Carry On actress Hattie Jacques appeared in the advert as a school crossing patrol officer.[26]

In the late 1980s and early 1990s, before the reintroduction of the tap pocket campaign, advertising for Asda had featured the Fairground Attraction song "Perfect". In 2004, Sharon Osbourne was selected to be part of a new marketing campaign by Asda; her last advert was aired in August 2005.

From 1990 to 1992, they were the sponsors of Sheffield Wednesday F.C. during two seasons in modern times – when they won promotion from the Football League Second Division as Football League Cup winners and finished third in the Football League First Division (last season before the creation of the FA Premier League).

In December 1997, the Spice Girls licensed their name and image to Asda for the creation of over 40 different Spice Items for Christmas 1997, including goods such as party supplies, official merchandise, and Spice Girl branded kids' meals in the stores' restaurants.[27] The Spice Girls reportedly earned £1 million for this sponsorship deal.[28]

In the smiley face "rollback" campaign, also used in Walmart advertisements, a CGI smiley face bounced from price tag to price tag, knocking them down as customers watch. The focus of these campaigns is to portray Asda as the most affordable supermarket in the country, a claim that was challenged by competitors, especially Aldi & Lidl. In 2006, Asda advertising was themed around singing children and the slogan "More for you for less", and the previous tap of the trouser pocket advertising was reduced to a double-tap on a stylised 'A', still producing the 'chinking' sound. This included an advert during the 2006 FIFA World Cup featuring the England football player Michael Owen in an advert with the children singing Vindaloo. In 2007, the advertising campaign abandoned the rollback hook in favour of featuring celebrities including Victoria Wood and Paul Whitehouse working as Asda employees.

For Christmas 2007, Asda reintroduced the "That's Asda price" slogan[29] as well as the famous 'jingle' to some of its adverts, this can also be heard on its in-store radio station 'Asda FM'.

In 2008, the company re-focused on price with a "Why Pay More?" campaign both on TV and in stores. Asda TV commercials in April 2009 focused on price comparisons between Asda and its rivals, using information from mySupermarket. The music being used in these adverts is the Billy Childish version of the classic Dad's Army theme tune. The old Asda jingle is not included in these,[30] but appeared in a 2008 Christmas advert.[31] Asda returned to the former pocket tap adverts in March/April 2009, with the slogan "Saving You Money Every Day."

Asda has been winner of The Grocer magazine "Lowest Price Supermarket" Award for the past 16 years,[32] and uses this to promote itself across the UK. In August 2005, rival supermarket chain Tesco challenged Asda's ability to use the claim that it was the cheapest supermarket in the country, by complaining to the Advertising Standards Agency. The ASA upheld the complaint[33] and ordered Asda to stop using it, citing that The Grocer magazine survey was based on limited and unrepresentative evidence as it examined the price of just 33 products, that the survey did not study low-cost supermarkets such as Aldi, and that their price checker, mySupermarket, doesn't include Morrisons, which was mentioned a few times. As a result Asda no longer cites itself as "Officially Britain's lowest priced supermarket", instead using "Winner: Britain's lowest price supermarket award".

False advertising

In 2010, a national press ad for Asda on a double-page spread was headed "The big Asda Rollback" with headings stating "Lower prices on everything you buy, week in week out" with equal prominence to a column headed "Lower prices than any other supermarket"; that the arrows underneath the heading "Lower prices than any other supermarket" compared prices at Asda with prices at Sainsbury's, Tesco and Morrisons. The ASA ruled that in the context in which it appeared, it was ambiguous in that it could be interpreted either as referring to price reductions that had taken place within Asda or to price comparisons with the named competitors. In addition, because the ad did not explain that the price reductions had not necessarily taken place in the week that immediately preceded the ad, they concluded that the headings which stated the number of price reductions that had taken place in each product category were misleading. The ASA also concluded that the "Lower prices than any other supermarket" claim in the advert was misleading.[34]

In 2011, a national TV advert showed a range of toys next to a banner that stated "1/2 PRICE TOYS". The voiceover said "The only serious thing in ASDA's Toy Event are the prices! Everything is at least half price!" On-screen text throughout most of the advert stated "Majority of Stores. Subject to Availability. Furniture with Doll's House sold separately". Asda tried to explain to the ASA that all of the toys featured in the ad were at half price or less and they believed that it was clear that the half price related only to toys in the Toy Event.

The ASA disagreed, and referred to the claim "Everything is at least half price!" was likely to imply to viewers that all toys were included in the sale. As all toys were not included in the sale, and in the absence of a qualifying statement, the ad was misleading.[35]

The ASA ruled that a television advertisement in 2011 for the new Asda price guarantee was misleading in that the small on-screen text that stated "Exclusions apply" was not sufficient to warn viewers that the Asda price guarantee did not apply to non-grocery items.[36]

The ASA also ruled against two national press ads one which showed hardback and children's books and one that showed football related items with text stating "If your grocery shopping could have cost less elsewhere we'll give you the difference - Guaranteed!" Although each advert had "Exclusions apply" and that other text stated "If your grocery shopping could have cost less elsewhere we'll give you the difference", it felt that given the prominent appearance of the hardback and children's activity books and football related items and the prominent appearance of the logo "ASDA Price GUARANTEE" and "Guaranteed!", they considered the footnote and other text referred to above was not sufficient to warn readers that non-grocery items particularly those included in the advertisement were not included in the Asda price guarantee.[36]

Another advertisement from Asda, in which it featured World Cup related products and an Asda price guarantee was misleading as the World Cup related products were exclusive to Asda and not, therefore, available at Morrisons, Tesco or Sainsbury's.[36]

In 2009, the ASA challenged whether a press ad which showed a large green arrow bearing down on a smaller yellow arrow with a crumpled tip and "Asda 2955 products cheaper" should set out how the general price claims made in the ads could be verified by consumers. Because it was not possible for consumers or competitors to check the products and prices used in the comparison using mySupermarket.co.uk, and because the ads did not set out how consumers and competitors could check that information for themselves, the ASA concluded that the ads did not satisfy the criterion of verifiability as defined in the 2006 European Court of Justice ruling, and were therefore in breach of the advertising Codes.[37]

On 25 October 2011, an advert stated, "Last Thursday, an independent price checker confirmed that ASDA had this many branded products cheaper than Argos" with a tag showing "ASDA 551 Cheaper" and "Argos 139 Cheaper". Smaller on-screen text stated "Independently price checked by skuudle". Argos revealed that on the same date of claim, they had data to support the two stores offered 1191 identical branded products, of which Asda was cheaper on 846 and Argos cheaper on 336, and that there were discrepancies in counting products based on variations of colours, delivery prices being included, and level of service offered.

The ASA ruled that, due to the significant limitations and qualifications to the basis of the price comparison which were not included in the ad, or in the terms and conditions on Asda's website, the approach taken in making the comparisons was unfair and misleading.[38]

A press ad, which appeared on 26 September 2011, was headlined "Only one supermarket is ... always 10% cheaper or we'll give you the difference guaranteed". However, at the top of the ad there was a banner that contained the claims "SALE", "Half Price", "Price Drop", "50% off", "1/2 price", "cheap" and that part of the headline claim "... always 10% cheaper" appeared in bold text in the middle of the ad. The ASA considered the banner, together with the headline was likely to be interpreted by consumers as claims that referred to the price of ASDA goods. Since consumers could interpret that claim as one which guaranteed to refund the difference, should ASDA not be the lowest on price, the ASA considered the presence of the claim "only one supermarket is always 10% cheaper" could create the impression that ASDA were always 10% cheaper and would be interpreted as a 'lowest price' claim. The ASA therefore concluded that the advert was misleading. It also noted the footnote explaining the APG contradicted ASDA's absolute claim that they were always the lowest on price, and that the disclaimer was also misleading.[39]

In 2009, a four-page regional press wraparound included several maps and images of a proposed development in New Barnet, and described the benefits the development would bring to the local area. The advert included a development site plan and map, which marked out the proposed Asda store, the existing Sainsbury store and the sites of the proposed, approved and existing Tesco stores.

Because it was not clear that the marked-out area relating to the Asda store was for only the store floorspace, whereas the marked-out area relating to the Sainsburys store included store floorspace and additional buildings, and the marked-out area relating to the proposed Tesco area was not based on an approved plan, the ASA concluded the advertisement was misleading.[40]

Public relations spending

Energy efficiency

Asda was the top-performing supermarket in the CRC Energy Efficiency Scheme Performance League Table, coming in at 37 and beating Morrisons at 56, Tesco at 93, and Sainsbury's at 164.[41]

Ethical trading

Asda has signed up to the Ethical Trading Initiative (ETI) which respects workers' rights for freedom of association and a living wage. Implementing this initiative is difficult, however, because the concept of a living wage varies between countries and the buying strategies of a major importer like Asda have an indirect impact on national minimum wages by obliging governments to set them low enough to stop businesses from going elsewhere.[42] Industry pressure groups such as Labour Behind the Label and War on Want have argued that Asda and other budget retailers use unethical labour practices in the developing world to keep UK prices low.[43][44] The National Farmers' Union, representing UK farmers and growers, has argued that Asda and other major supermarkets have made large profits and kept consumer prices low "by squeezing suppliers' margins to the point where many of them have gone out of business".[45] Asda have also refused to sign up to and donate to the Rana Plaza Donors Trust Fund, to donate compensation to the families of workers in Bangladesh killed when their factory building in Rana Plaza collapsed in 2013. Campaigners believe Asda is unwilling to set a precedent on indemnity pay for large scale industrial accidents.[46]

In 2009, Asda's Valentine's Day roses, sold at £2 for a dozen, were said to be ethically sourced by the supermarket. This claim went against research carried out by War on Want.[47]

Call for boycott

In October 2010, Chairman Andy Bond was a signatory to a controversial letter to The Daily Telegraph,[48] which claimed that "The private sector should be more than capable of generating additional jobs to replace those lost in the public sector, and the redeployment of people to more productive activities will improve economic performance, so generating more employment opportunities." This was followed by calls for a boycott of Asda, as well as the companies represented by the other signatories to the letter on the grounds that "Companies that support the CSR are failed corporate citizens."[49]

Sponsorships
Charities

Asda supports 6 main charities through its stores.

Asda Smart Price

Asda's Smart Price logo

Asda Smart Price is a no-frills private label trade name. The equivalents from the three other big supermarkets are Tesco Everyday Value,[57] Sainsbury's Basics and Morrisons M Savers.

The Smart Price brand originated in the Asda's Farm Stores brand launched in the mid-1990s, which consisted of products that were offered at a lower price than the equivalent famous name brand product and Asda's own brand equivalent. The Farm Stores brand originally consisted of a small number of food only products, largely frozen such as frozen chips and a small range of ready meals, this range later expanded to include fresh food.

Smart Price products are almost always the lowest price option (known as Our Lowest Price) in a product category in Asda stores. Occasionally this difference is only a few pence, however in others it is a marked difference. For example, a box of Smart Price Biological Washing Powder costs 50 pence while the equivalent Asda brand washing powder costs £1.50 and well known name brand alternatives cost from £2 upwards.

The Smart Price label was originally a food only brand, however it has since expanded to cover almost every product range in the store, including clothing and furnishings with the George Smart Price brand. Like early generic products in the US some Smart Price products lack what can be thought of as 'frills' in the modern brand name or supermarket own brand, for example the Smart Price toothpaste has an old fashioned screw cap rather than the now more common flip cap and the Smart Price range of crisps come in traditional clear plastic bags rather than the foil bags common to most name brand versions.

Asda's Smart Price logo and packaging has changed several times since its introduction. In 2012, it was revised to match the branding of the Walmart Great Value line,[58] but a further redesign in 2014 removed the similarity in visual style.

George clothing

Asda has its own range of clothing known as George which was created in 1990.[59] This is marketed as quality fashion clothing at affordable prices. Walmart also sells the George brand in Argentina, Canada, China, India, Japan, Mexico, and the US (and in South Korea until Walmart pulled out of that market). The label is named after George Davies, founder of Next, who was its original chief designer. Davies himself parted company with Asda in 2000 and is no longer associated with the brand.[60]

In 2005, Asda stated that the George range was a £1.75 billion business, including sales from Walmart stores in the USA and Germany. Mintel estimate that George is the fourth largest retailer of clothing in the United Kingdom, after Marks & Spencer, the Arcadia Group and Next.[61]

Asda was the first supermarket to stock wedding dresses. Part of the George line, they cost £60 while adult bridesmaid dresses ranged between £30 and £35, at launch.[62]

Stores

Current stores

An Asda Walmart Supercentre in Patchway, Greater Bristol

Asda originally had a "simple and fresh" store format, which under Archie Norman's team and the focus on a Walmart style strategy became more emphasised. The stores are generally white and green, with simplistic layout but built on a Walmart larger footprint format – Asda's average store is almost 20% bigger than its rivals, but stocks 20% fewer lines.

However, the preferred large-format stores have brought problems to Asda's growth beyond its spurts in both the 1990s and immediate post Walmart era. With the UK's tight planning restrictions, the opportunity to increase retail space via new store builds has been limited. Rather than follow rivals Tesco and Sainsbury's into "local" format smaller-footprint stores, Asda has chosen to adapt its format to niche stores to retain longer term growth.

On 16 April 2010, Asda announced plans to open over 100 new non-food stores as part of an ambitious five-year plan.[63]

In February 2011, Asda announced the purchase of 6 stores from Focus DIY, which will be converted into supermarkets subject to approvals and local planning consents.[23]

Asda Supercentres

Following the takeover by Walmart, several "Asda Walmart Supercentres" have been opened, creating some of the largest hypermarkets in the United Kingdom. From around 2008 onwards, all new Supercentres have been solely branded as Asda Supercentre without the Walmart branding. The first Supercentre opened in Livingston, Scotland, in 2001.[64] The Minworth, Birmingham, store is currently the largest Asda Supercentre with a net sales floor of over 11,000 m2 (120,000 sq ft).[65] The Milton Keynes store is currently the second largest Asda Supercentre and the third largest is located in Huyton, Merseyside. As of 2007 there were 29 Supercentres in the UK.[66]

The interior of the Asda store in Liscard, Wirral, taken from the store's staff and visitor reception area.
Asda superstores

Asda superstores are large supermarkets with a non-food offer slightly smaller than an Asda Supercentre. As of 2011 there are 231 superstores in the UK.

Asda superstore in West Bridgford, Nottingham 
Asda superstore in Bury St Edmunds, Suffolk 
A smaller, older Asda Superstore in Holt Park, Leeds 
Many stores, such as this one in Hatfield, Hertfordshire, display the older, bordered logo 
Asda Supermarket

The Supermarket division was formed in 2009. As of July 2010, there are 26 small format supermarkets some of which were acquired from the Co-operative. The first three acquisition stores opened mid-2009 in Wellington, Lancing and Pershore followed by Cumnock, Tweedmouth and Kingsheath in 2010. The largest Supermarket format store in the UK is in Highbridge.

In May 2010, Asda announced the purchase of the 193 UK stores of Danish discount retailer Netto in a £778 million deal. The stores continued to trade as Netto stores until early 2011, when Asda integrated the stores into its supermarkets division, designated for shops smaller than 2,300 m2 (25,000 sq ft).[67]

Asda Living
An Asda Living branch in Leeds.

In October 2003, Asda launched a new format called 'Asda Living'. This is the company's first "general merchandise" store, containing all its non-food ranges including clothing, home electronics, toys, homewares, health, and beauty products. With these stores they have linked up with Compass Group who operate the coffee shop Living Cafe within some of the stores. The first store with this format opened in Walsall, West Midlands. As at 1 April 2010, there were 24 stores with an average 2,600 m2 (28,000 sq ft) sales selling an average 23,000 non-grocery products in-store.

George Stores

In 2011, Asda announced its intention to establish a small number of pilot George stores.[68] In January 2012 Asda announced that it had agreed to terms with two franchise partners to open international George stores. Through the agreement with SandpiperCI, based in the Channel Islands, the company will be responsible for opening George franchises in both Jersey and Guernsey, and through the Azadea Group, headquartered in Beirut, Lebanon, the George franchise stores would open in the Middle East.[69][70] The opening of the first George stores in both regions are expected before the end of 2012.

Asda Essentials

In April 2006, Asda launched a new trial format called 'Asda Essentials' in a former Co-op store in Northampton, followed by another in Pontefract a month later. This was the old Kwik-Save building for Pontefract. [71] The stores were modelled on France's Leader Price chain, with a smaller floorplate than Asda's mainstream stores and with a primary focus on own-brand products, only stocking branded items that were perceived to be at the "core" of a family's weekly shop with the aim being to challenge the dominance of Tesco and Sainsbury's in the convenience store market while at the same time addressing competition from discount supermarkets such as Aldi, Lidl and Netto.[71] On 6 December 2006, The Guardian newspaper reported that further planned store openings were under review following poor sales in the existing outlets, while the range of branded products being carried was also being expanded due to customer demand.[71] In January 2007 it was announced that the original trial store would close within a month after only 10 months of trading.[72] The Pontefract store remains open.

Former stores

George clothing stores

In 2004, the George clothing brand was extended to a number of standalone George stores on the high street, with the first George standalone store to open was in Preston. In 2008, all George standalone stores were closed due to high rental costs resulting in low profitability,[73] The Falkirk and Crewe branch were kept open as they are located next to the Asda store. The Manchester Fort store was converted into an 'ASDA Living' store.

Distribution

Asda also has 26 depots all across the UK which distribute across the network of stores. There are depots for chilled foods, clothing and ambient products, such as carbonated drinks and cereals.[74]

Other interests

Asda's property development arm, Gazeley Limited, was sold to Economic Zones World (EZW), a Dubai World subsidiary, in June 2008 for in excess of £300m.[75] Gazeley was involved in the development of distribution warehousing in the UK, mainland Europe and China, for customers including third-party logistics providers, original equipment manufacturers, retailers and their suppliers.

Asda Financial Services

Asda has a financial services division, similar to those operated by Tesco, Sainsbury's and other retailers. Asda simply attaches its own brand to products provided by other companies. Services they offer include insurance (provided by Norwich Union), credit cards (provided by Grupo Santander) and loans (provided by the Funding Corporation Ltd.). The financial services division of the organisation does not directly sell these services in store and instead uses the supplier of that product by telephone or online/postal application. Until June 2009 some stores had credit card representatives provided by GE Capital Bank and then Grupo Santander. Marketing and management of financial services is co-ordinated in house and many stores have a financial services co-ordinator, responsible for promoting the products and ensuring legal compliance. The Financial Services division is also responsible for gift cards, Christmas Saver and Business Rewards.[76]

Loyalty card

The company does not run a loyalty card scheme, stating that "we prefer to invest the money we'd use to set up such a scheme into driving down prices for our customers". However it did trial the Asda Clubcard in the 90's across multiple stores.[77] The Asda-branded Credit Card (provided by Grupo Santander) offers a points scheme; points can be earned on all spending.[78]

Internet operations

An Asda Mercedes-Benz Sprinter Delivery Van.

Asda launched its online retailer service in 1998. It began with a dedicated depot based in Croydon, South London, but this was closed with a number of redundancies shortly after, as sales were lower than expected. It continued the online service, but emulated the Tesco store-based model instead.

Since the roll-out of the grocery delivery operation Asda has moved into non-food online retailing. Current categories include entertainment, contact lenses, furniture, travel, electricals, gifts, mobile phones and flowers.

In May 2004, it announced an expansion of the service which would increase coverage from 30% of the UK population to 35%.

In January 2007, Asda launched www.asda-electricals.co.uk, to compete with Tesco's highly successful Tesco Direct. In October 2008, Asda launched direct.asda.com superseding its electricals website, and also selling several additional product categories, such as homeware, garden and toys.

This new venture is part of its online business Asda Direct, with more than 3,000 domestic and home electrical products. Asda's long term ambition to capture 5% of the £1.9 billion market by 2012.

In January 2007, the company sold its Durabrand 1005 DVD player for only £9, making it the United Kingdom's lowest priced DVD player,[79] which sold out in just two days from start of the promotion.

In 2012, Asda launched a new online tyre website with the aim of competing against large fast fit operations. The Asda Tyres website utilises a network of independent tyre fitters around the UK with a click and reserve model whereby customers do not have to pay for goods online.[80]

Financial performance

As of March 2009, Tesco has a 30.4% share of the UK grocery market while Asda's share is 17.5%, followed by Sainsbury's at 16.1%, and Morrisons at 11.8%.[81]

According to CACI, as of 2006, Asda has market dominance in 14 postcode areas; DY (Dudley), B (Birmingham), CH (Chester), L (Liverpool), WN (Wigan), BL (Bolton), BB (Blackburn), LA (Lancaster), HU (Kingston upon Hull), SR (Sunderland), DH (Durham), NE (Newcastle upon Tyne), G (Glasgow) and AB (Aberdeen).[82]

Supermarket Consumer
Spend (£000s)		 Market share
March 2009		 +/- from
March 2008
Tesco 6,453,370 30.4% Increase 4.3%
Asda 3,411,938 17.5% Increase 8.5%
Sainsbury's 3,239,500 16.1% Increase 5.7%
Morrisons 2,327,583 11.8% Increase 7.2%

Employee relations

Asda has 150,000 employees, whom it refers to as "colleagues" (90,000 part-time, 60,000 full-time). The company has featured prominently in lists of "Best companies to work for", appearing in second place in The Times newspaper list for 2005.[83] It offers staff a discount of 10% on most items (exceptions include fuel, stamps, lottery, giftcards and tobacco related items).[84]

The company was fined £850,000 in 2006 for offering 340 staff at a Dartford depot a pay rise in return for giving up a union collective bargaining agreement.[85] Poor relations continued as Asda management attempted to introduce new rights and working practices shortly thereafter at another centre in Washington, Tyne and Wear.[86]

Some compromise was reached by June of that year, when a five-day strike was called off after Asda management and the GMB union reached an agreement.[87]

Relations have improved since, with both Asda and the GMB marking the death of a worker together on Workers' Memorial Day in 2010.[88]

In 2013, tens of thousands of Asda workers across the UK were hit with a tax complication because of an anomaly in Asda's payroll system. Asda employees receive their pay every four weeks, which means that once every 20 years they are paid 14 times a year rather than 13. Whilst most companies handle this properly, Asda's payroll system didn't, which meant that workers had, through no fault of their own, paid less tax for the year than they should have. This resulted in most full-time and a small number of part-time workers receiving a demand from HM Revenue & Customs for between £72 to £160.[89]

Controversies

Dairy price fixing

An Asda Petrol Station sign at Great Yarmouth store in 2008

In December 2007, Asda, Sainsbury's and other retailers and dairy firms admitted to the price fixing of dairy products between 2002 and 2003.[90] The price fixing operation was calculated to have cost consumers around £270 million.[91]

Asda commented, "Everyone at Asda regrets what happened, particularly as we are passionate about lowering prices. Our intention was to provide more money for dairy farmers, who were under severe financial pressure at the time."[92] In total, Asda was fined £18.21 million by the Office of Fair Trading for its part in the cartel.[93]

2013 horsemeat scandal

In 2013, DNA tests revealed that horsemeat was present in Asda's fresh beef Bolognese sauce, the first instance during the 2013 meat adulteration scandal of horsemeat being found in fresh meat.[94]

Asda Mobile

Main article: Asda Mobile

Asda also operates a mobile phone network called Asda Mobile, which was launched in April 2007. This is provided in partnership with EE.

Note: Unlike the main UK mobile operators, Asda Mobile has chosen not allow its customers to send money by SMS to support good cause appeals, such as Cancer Research and UNICEF.

Awards

See also

References

  1. ↑ "Asda Stores Limited - Open Company". Retrieved 23 October 2014.
  2. ↑ "Store idea". Sutton Guardian. p. 5.
  3. ↑ "Contact the right service team". Asda. Archived from the original on 22 July 2010. Retrieved 20 June 2010.
  4. ↑ http://www.statista.com/statistics/279900/grocery-market-share-in-the-united-kingdom-uk/. Missing or empty |title= (help)
  5. ↑ "About Asda". Retrieved 20 April 2015.
  6. ↑ David Thornton. The Story of Leeds.
  7. ↑ "Asda through the years - a story of innovation and saving you money". Asda.com. 2 December 2011.
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  9. ↑ "Asda through the years - ASDA.com". Retrieved 24 April 2015.
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