ASDA
From Free net encyclopedia
- For other uses, see ASDA (disambiguation).
ASDA is a chain of supermarkets in the United Kingdom offering food, clothing and general merchandise products. It became a subsidiary of Wal-Mart in 1999, and is currently the second largest chain in the UK after Tesco.
ASDA is Wal-Mart's largest overseas subsidiary, accounting for almost half of the company's international sales. ASDA's precise turnover is not disclosed, but based on market share it is thought to be in excess of £15 billion. As of January 2006, there were 21 ASDA/Wal-Mart Supercentres, 243 ASDA Superstores, 37 ASDA Smaller/town centres, 5 ASDA Living stores, 10 Georges, and 24 depots (distribution centres). ASDA employs 150,000 "colleagues" (90,000 part-time, 60,000 full-time). The company is also engaged in property development through its subsidiary company, Gazeley Properties Limited.
As a wholly owned division of Wal-Mart, ASDA isn't required to declare quarterly or half-yearly earnings. It submits full accounts to Companies House each October.
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History
ASDA was founded in 1965 by a group of farmers from Yorkshire. The name is a contraction of Associated Dairies. For a short time in the 1980s Asda Stores Ltd. was a subisdairy of ASDA-MFI plc other companies in the group were Assoxiated Dairies Ltd., the furnture retailer MFI and Allied Carpets. After the sale of MFI and Allied the company name changed to ASDA Group plc. The dairy division was sold to Northern Foods plc. The company went through a troubled period in the early 1990s, but was then revived under the leadership of Archie Norman, who later became a front bench Conservative MP. He was chairman of the company during the period 1996–99.
Image:ASDA edinburgh store.jpg ASDA, which then owned 229 stores, was purchased by Wal-Mart of the United States, on July 26, 1999. Following the takeover by Wal-Mart, several "Asda–Wal*Mart Supercentres" have been opened, creating some of the largest hypermarkets in the United Kingdom. The first of these stores opened at Cribbs Causeway, near Bristol, in June 2000. At first, it was criticised for its scale and condemned as an eye-sore, but the format has now become extremely popular. In November 2004 a refurbishment of the hypermarket was completed, addressing some of the complaints.
In 2005, amid reported concerns within Wal-Mart about a slight slippage in market share, partially due to a resurgent Sainsbury's, ASDA's chief executive, Tony de Nunzio, was replaced by Andy Bond.
In October 2004 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. The first store with this format opened in Walsall, West Midlands in October 2004, and at the time of writing has been followed by three further stores in Cortonwood (Barnsley), Altrincham and Byker (Newcastle-upon-Tyne). A fifth has now opened in Thurrock, Essex. Tesco is also trialling a similar format, "Homeplus", in Denton, Greater Manchester. Asda has also opened a number of stores containing its George range only in several city centres.
In March 2006, ASDA launched a new format called ASDA Essentials in a former Co-op store in Northampton. With a primary focus on own-brand products on a much smaller floorplate than ASDA's mainstream stores, the Essentials will only stock branded products that are perceived to be at the "core" of a family's weekly shop. This is seen as ASDA's response to the increasing strength of Tesco and Sainsbury in the convenience store sector. If the trial is a success, it will be rolled out nationally.
ASDA is currently expanding its range of services to include Financial Services sold in store and at online. Products currently sold are Car, Home, Travel, Life and Pet Insurance, Child Trust Funds and Credit Cards.
Unlike Tesco and Sainsbury's, ASDA does not operate convenience stores, a position it shares with the fourth major British supermarket chain Morrisons.
Market Share
Tesco has 30.4% of the UK grocery market while ASDA's share is 16.6%.
In March 2006 an updated report suggested that, in February 2006, a resurgent Sainsburys had almost overtaken ASDA into second place, at 16.2%. On current performance, therefore, ASDA is expected to be officially relegated to third place at some point in the next quarter.<ref>[1]</ref> As of 29 March 2006, ASDA is on 16.6% and Sainsbury's on 16.2%, compared to 16.8% versus 16.0% at the same point in 2005.<ref>[2]</ref>
Marketing
ASDA is known for two famous marketing campaigns. In the "ASDA price" campaign, customers tap their trouser pockets, producing a 'chinking' sound as the coins that Asda's low prices have supposedly left in their pockets knock together. In 2004, Sharon Osbourne was selected to be part of a new marketing campaign by ASDA, her last advert was aired in August 2005. In the smiley face "rollback" campaign also used in Wal-Mart advertisements, a CGI smiley face bounces 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 is challenged by competitors, especially Tesco.
ASDA has been winner of the Grocer Magazine "Lowest Price Supermarket" Award for the past 8 years, 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<ref>[3]</ref> and ordered ASDA to stop using it, citing that the Grocer Magazine survey was based on limited and unrepresentative evidence, and that the survey did not study low-cost supermarkets such as Aldi. As a result ASDA no longer cites itself as "Officially Britain's lowest priced supermarket", instead using "Winner: Britain's lowest price supermarket award".
Employee satisfaction
Early in 2006 the company was found to be in breach of the UK employment law with regard to trade unions and has been fined by a court £850,000. They were also in trouble for asking some Asian employees working in their distribution centres to produce their passports proving they can work in the UK. This action has led to investigations into claims of racism. This led workers' unions to ballot staff on strike action in 21 of their distribution centres.
ASDA has featured prominently in lists of "Best companies to work for", appearing in second place in the Times newspaper list for 2005. It offers staff a discount of 10% on all items except petrol and diesel.
In 2005, the company was criticised by some of its employees for the treatment their fellow workers received in both stores and depots across the country. In late 2005 it was revealed in a survey carried out by the company that only 1 in 4 of its staff actually shopped in-store.
On an "extra discount day" in December 2005, ASDA temporarily increased the staff discount to 20%, but excluded beers, wines and spirits ('BWS') from the extra discount for reasons of "operational profit protection". The GMB Union attempted to get Tesco to offer a similar discount to ASDA staff as a publicity stunt, and ASDA subsequently included BWS in the extra discount, but with a maximum spend of £100.
Wal-Mart's US operation has come under scathing attack regarding the treatment of its workforce with the release of a movie by a prominent Hollywood producer, Robert Greenwald, which parodies the company's claims that it is an employee friendly, ethically minded company, and works in support of local communities. Walmart has responded with a film of its own, promoting working practices within the company.
Online
ASDA launched its online retailer service in 1998, but from the start had over-estimated demand. It started off from a dedicated depot facility based in Croydon (South London) but was closed with a number of redundancies shortly after as sales were not as expected. It continued the online retailer service but copied the Tesco store based model instead. In May 2005 it announced a major expansion of the service which will increase coverage from 30% of the UK population to 60%.
George Clothing
Established in 1990, George has steadily risen in popularity over the past 15 years.Today it is the UK’s biggest fashion retailer by volume and fourth by value (Source: Fashiontrak). It has consistently achieved awards voted for by the press and for shoppers. It won Prima magazine’s High Street Fashion Awards for Value for Money Retailer of the Year three times and Childrenswear Retailer of the Year twice as well as winning the One to Watch award. Most recently at the Tommy’s Parent Friendly Awards, George carried off the prize for Best Children’s Clothing 2005.
Until the 1980s, shopping for clothes in Britain could often be a dull activity. Most clothing stores were traditional and old-fashioned, selling fairly uninspired products. All this changed in 1982, when the Next chain of fashion stores launched its then unique and innovative shopping concept.The man behind this revolution was George Davies – regarded by many as a fashion retailing genius. While Next was making its mark, the ASDA supermarket chain was starting to struggle and by 1990, was almost bankrupt. However, the appointment of Archie Norman as new chief executive signalled a change to ASDA’s position in the market.
Part of Archie’s strategy was to create a mix of products that would be unrivalled. He hired George Davies to set up ASDA’s own private-label clothing brand – George. In 1990 George Davies launched the George label in 100 ASDA supermarkets and achieved sales of £130 million in the first year. By 1992 sales had increased by 40%, and in 1995, ASDA acquired the George business. During the same year George broke the £500 million sales barrier.
In 1999,ASDA’s new parent Wal-Mart declared that George was “the jewel in the crown”. Within less than 10 years, George’s second fashion retailing revolution was well underway. Until this time, buying clothing in a supermarket had meant only the basics, a T-shirt or perhaps a pair of socks. In 2000, George Davies left the company and Andy Bond took over as Managing Director, leading a phase of exceptional growth. A year later George was sold for the first time in Germany, launching in five Wal-Mart stores. Also in the same year, George went on sale in the US. By the end of 2003 George had achieved sales of £1 billion. Today it employs 6,300 staff worldwide. In 2004 George launched its website, www.george.com which showcases the brand. In 2005, it was announced that ASDA had overtaken Marks & Spencer as the UK's number one clothing retailer by volume of sales.
George has established itself as a stylish, quality brand that has revolutionised the value fashion market in the UK over the past 15 years. It is now set to become a global fashion brand. In the past, it was generally assumed that customers had to compromise – if the price was low, the quality was bound to suffer and style would be sacrificed or there would be low expectations. The retail market was divided between discount stores offering low-price basics and upscale stores with well-designed, good quality garments at much higher prices. George was designed to be different. Right from the start, the brand offered customers style, quality and value. These three words are at the heart of the brand – they define it and are the three pillars upon which George is built and the reason for its success.
In 2003, ASDA annouced that it was to trial stand-alone George fashion stores on the High Street, marking a new direction for the brand. By the end of 2006, 12 stores will have opened, as well as upto 15 ASDA Living stores, which showcase George on the first floor of out-of-town retail park outlets. As competition continues to grow in the ever growing value fashion market, George continues to reposition itself as a style-led retailer, with ranges such as G21 and Fast Fashion for women, and Casual Collection for men, as well as maintaining its value in price commitment with ranges such as Must Have.
Awards
- 2001, 2002, 2003 — Voted a top 10 UK employer by the Sunday Times Top 100 Best Employers Survey
- 2002 Nestlé Social Commitment Award, awarded by peers in the food industry
- Fine of £850,000 for breaking UK employment Law.
Trivia
- 21% of ASDA's "colleagues" are over age 50.
- ASDA is the first supermarket to stock wedding dresses. Part of the George line, they cost just £60. Adult bridesmaid dresses ranged between £30 and £35, at launch.<ref>ASDA Press Centre: From Supermarket to Church Aisle for £60, 23 January 2006.</ref>
See also
References
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