Asda

**Asda Stores Ltd.**, trading as **Asda**, is a British supermarket retailer, headquartered in Leeds, West Yorkshire. The company was founded in 1949 when the supermarket owning Asquith family merged with the Associated Dairies company of Yorkshire. It expanded into the south of England during the 1970s and 1980s, and acquired Allied Carpets, 61 large Gateway Supermarkets and other businesses, such as MFI, then sold off its acquisitions during the 1990s to concentrate on the supermarkets. It became a subsidiary of the American retail giant Walmart after a £6.7 billion takeover in July 1999, and was the second-largest supermarket chain in Britain between 2003 and 2014 by market share, and is currently third behind Tesco and Sainsbury's.

Besides its core supermarkets, the company also offers a number of other services, including financial services and a mobile phone provider that uses the existing EE network. Asda's marketing promotions are usually based solely on price, and since 2015, like its parent company, Walmart, Asda has promoted itself under the slogan "Save Money. Live Better". Since 1987, Asda has also had its property development subsidiary, McLagan Investments Ltd, which is based at the main Leeds head office site. The company is responsible for acquiring land for new Asda store developments, along with the relevant planning applications that are submitted to local councils, and the potential acquisition of any retail stores or developments placed for sale on the open market by any of its main competitors.

As a wholly owned division of Walmart, Asda is not required to declare quarterly or half-yearly earnings, but it submits full accounts to the U.S. Securities and Exchange Commission each November. Despite being a subsidiary of Walmart, the company has more autonomy than any of the other supermarket chains within the Walmart International division, and has retained its own British management team and board since the 1999 takeover.

As of April 2018, Sainsbury's and Asda are in talks of merging. Such a merger would give the combined supermarkets an estimated 30% share of the UK grocery market. Any merger proposal resulting from these talks would be subject to investigation by the UK regulator, the Competition and Markets Authority, before being allowed to take place.

## History

### Early history

The Asquith family were butchers based in Knottingley, West Yorkshire. In the 1920s, their rising aspirations meant that they expanded their business to seven butchers shops in the area. Their sons, Peter and Fred, later became founding members of Asda.

Around the same time, a group of West Riding dairy farmers, including the Stockdale family and Craven Dairies, joined together under the banner of J.W Hindell Dairy Farmers Ltd. This company diversified in 1949 to become Associated Dairies and Farm Stores Ltd, with Arthur Stockdale as the managing director.

### First stores

In 1963, the Asquith brothers converted an old cinema building, the Queens in Castleford, into a self-service supermarket. Another swiftly followed in the old indoor market at Edlington, near Doncaster. Both stores traded under the name of 'Queens'. Their next store was a purpose-built supermarket in South Elmsall, near Pontefract on the site of the old Palace cinema.

In 1965, when the Asquith brothers approached Associated Dairies to run the butchery departments within their small store chain, a merger was proposed. So they joined together with Noel Stockdale, Arthur Stockdale's son, to form a new company, Asda (**As**quith + **Da**iries) (capitalised from 1985).

Another store opened in Wakefield then in Wortley, Leeds which was swiftly followed by another supermarket in the Whitkirk suburb of Leeds, which consolidated the newly formed supermarket division of Associated Dairies. By 1967, the company had moved outside of Yorkshire to set up a store in the North East in the industrial town of Billingham, Teesside, which is still trading to the present day. By 1968, the Asquith brothers had their stake in the merger bought out by Noel Stockdale, and the Asda Queens stores became the sole property of Associated Dairies and the Queens name was removed as the stores became known solely as Asda.

Asda took advantage of the abolition of retail price maintenance to offer large-scale, low-cost supermarkets. This was aided by the risky decision to acquire three struggling US-owned branches in the mid-1960s of the GEM retail group. The Government Exchange Mart stores in Preston, Lancashire, Cross Gates, Leeds and including the first out-of-town store in West Bridgford in Nottingham, that opened in November 1964, had accumulated losses of £320,000 and offered to sell the stores for 20% of whatever Asda could recoup as losses from the Inland Revenue. They received the whole amount back so got the stores for free. The rent was only 10 shillings (50p) per square foot on a 20-year lease, with no rent reviews- all in all a great deal. Asda increased GEM's £6,000 per week sales to around £60,000 per week in just six months with the new stores named solely as just Asda.

Asda rebuilt the West Bridgford store in 1999, adjacent to the old site which was demolished and is now part of the current store car park. The Preston store was based on the ground floor of a converted mill which had been occupied by a supermarket called Fame prior to GEM taking over, and then subsequently Asda. The mill was demolished in the mid-1980s when Asda opened two new purpose-built superstores in the area. One was in the centre of Preston located at the Fishergate Shopping Centre, which closed in 1992, less than seven years after opening due to poor trading. And the second was located in the suburban district of Fulwood. The Fulwood store is still trading today and is a very popular store. The Cross Gates store in Leeds was closed in 1992, along with the Whitkirk and Wortley stores, and their replacement was a large superstore built in the Killingbeck area of the city which had opened in the autumn of 1991. The Wortley store ended up being sold to Netto UK in 1992, but was rebought when Asda acquired the Netto chain in 2011, to become part of its small supermarket division.

### Rapid expansion of the 1970s

The 1970s had seen Asda rapidly expanding to open large superstores in edge-and out-of-town locations, and to build stores with district centres in smaller towns. It also added more petrol filling stations to stores, along with car tyre bays run by ATS. With over 30 stores in the north of England, Asda began their expansion into the south of the country with the opening of new stores in the Estover area of Plymouth, Devon and Gosport, Hampshire in 1976. Closely followed by its first store in South Wales in Rogerstone, Newport, which relocated to a larger store in nearby Duffryn in 1989. South Woodham Ferrers, near Chelmsford, Essex and Whitchurch, Bristol.

By 1981, under the soon to be outgoing, Managing Director, Peter Firmston-Williams, 80 Asda stores were trading. When he first became head of the Asda stores division in 1971, with the approval of Chairman, Noel Stockdale, he introduced delicatessen counters and in-store bakery departments to all Asda stores. The last store to open under his tenure was in the Manchester suburb of Harpurhey. But the growth of the chain was slowing down and their southern expansion had been expensive. They had been fighting with southern rivals Tesco and Sainsbury's to acquire prime retail sites in the more affluent South East counties of England. Indeed, the first London store was not opened until 1982, in Park Royal, near Ealing, which was rebuilt in 2001.The Isle of Dogs and Charlton, London stores followed on rapidly in 1983. The 1970s and '80s saw the diversification of Asda's product base, including the acquisition of Allied Carpets in 1978, Wades Furniture, Asda Property, and in 1985, Asda Drive - where the company unsuccessfully piloted a scheme to sell cars in a few of its largest stores. These diversifications were as a result of Associated milking two cash cows. The dairy side of the business was making huge profits, as was the supermarket division. And with planning permission for new stores being restricted by local councils up and down the UK, and with prime sites being so expensive. Associated Dairies ambitions in the short-term could only be met by expanding rapidly with these peripheral businesses. Ultimately, these non-food ventures generated very little profit and drained capital expenditure away from the main dairy division and supermarket chain.

### Decline in the 1980s and early-1990s

The 1980s were a turbulent period for Asda as they moved away from their founding principles of price competitiveness and good value. In 1984, new Managing Director, John Hardman, made bold attempts to halt Asda's decline, which included the development of completely new look stores, first trialled in 1985 at a three-year-old store in Leamington Spa, Warwickshire, which contrasted with older Asda stores with their spartan, carton stacked, minimalistic interiors and chocolate brown and beige artexed walls.

A new green corporate logo which was capitalised as ASDA was also introduced. EPOS barcode scanning checkouts were introduced into refurbished and newly built stores from 1985, but it was not until 1994, that all stores had updated their IT systems to offer this technology. More upmarket and tastefully decorated stores with soft pastel colour tones, suspended ceilings and zoned areas were built, and introduced to older revamped stores. More specialist fresh food counters such as fresh fish, pizza bars, salad bars, and patisserie counters were brought in to entice more wealthier shoppers. Softer lighting was introduced to stores along with the launch of Asda own-label products in 1986, centralised distribution depots by 1989, and by the end of the decade the 'Asdale'-named clothing range was replaced by the clothing ranges from the newly formed George Davies partnership with Asda. Davies was an experienced and successful entrepreneur who had founded the Next clothing chain of retail stores. These changes were initially positive for the company, but they came at a cost.

The recession of the early 1990s impacted on the average household budget, and affected the amount of disposable income that the average consumer had to spend, and with rising inflation it hit Asda customers whose stores were more heavily concentrated in the north than in the more affluent south east harder. The move upmarket had also pushed in-store service and labour costs up which impacted on profit margins and sales.

Asda had also neglected many of the older stores within its estate by not refurbishing them in line with other stores that had been refurbished and its more expensive new store sites. One example was the Astley Bridge, Bolton store which had been built in 1970. This store did not receive its first major refurbishment until 1993, and was until that point still trading with the old blue and orange Asda corporate logo and signage attached to the building in various positions, and there were many other stores like that. It meant that Asda had left the older, outdated unrefurbished stores in locations where competitors were opening new stores more vulnerable to losing customers to their shiny new rivals.

Asda had also heavily increased prices across its ranges to try to offset growing operating costs and increase volume sales and margins which had narrowed within its stores, as a result customers deserted the chain in droves. This was compounded by problems with start-up costs and teething troubles with the new regional distribution depots. Computer systems taking restock orders from stores and then ordering goods, especially fresh food, from suppliers that were meant to come into the depots and then delivered on to the stores were not functioning properly, which meant stores ran out of stock of some items for days at a time. That also meant that the company had to temporarily use manual ordering, which of course meant a loss of sales at stores and wastage costs that ran into tens of millions of pounds. Asda was entering a vicious circle with a flawed and compromised trading strategy and with a management team who were floundering and in charge of a company heading into a steady decline.

Between 1985 and 1987, Associated Dairies Group PLC, and Asda Stores Ltd, merged with MFI (Mullard Furniture Industries) and the group was renamed Asda-MFI Group plc. The other companies in the group were Associated Dairies Limited, the furniture retailer MFI and Allied Carpets. After the sale of MFI in 1987, the company name changed to Asda Group plc. The Associated Dairies division was renamed as Associated Fresh Foods, the abattoir and meat processing plant at Lofthouse, near Wakefield, which supplied fresh meat to all Asda stores was renamed as Lofthouse Foods. The focus of the group had switched firmly by the late 1980s to the Asda store chain. In 1988, Asda had also acquired the Waring & Gillow, Colonel Gee, and Maple & Co furniture brands and Maples stores. Co-branded stores under the Allied Maples banner had appeared on major retail parks. But, in 1993, the whole fresh food division, including the Asda Produce, fruit and vegetable sourcing, processing and packing plant in Normanton, Wakefield, was sold off in a management buyout to other dairy and food processors. In the same year, Maples was divested in a management buyout, and became an independent company again until it went into liquidation in 1997, and the stores were bought out by the now defunct Allders department store chain. Allied Carpets and some of the co-branded Allied Maples stores were sold off to the now defunct Carpetland. This means that Asda has since had no connection with any of the firms from which its name was derived. Having effectively outgrown and divested of its original parent company, Associated Dairies, where it was only initially believed in 1965, that the tiny Asda supermarket division would only be a minor contributor to the dairy divisions profits, which at that time consisted of their wider and more profitable interests, including farms, dairies, butcher's shops, bakeries and doorstep milk deliveries.

### Near bankruptcy and purchase by Walmart

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. City estimates suggested that Asda had overpaid by around £300 million for 61 of the largest Gateway stores, two undeveloped store sites and a distribution centre. That was far above the net book value of the locations some of which were poorly sited. Asda has subsequently relocated or rebuilt more than 30 of the original Gateway stores since the late 1990s. This move overstretched the company and by 1991, it found itself in serious financial trouble and saddled with £1 billion of debt The company was close to breaching its banking covenants and was by this point regarded by city analyst's as a basket case, and Asda came very close to bankruptcy. The company raised funds through two major rights issues, one in 1991 and the second in, 1993. By the middle of 1995, with Archie Norman as CEO from 1991, along with his new management team in place, staged one of the most successful turnaround stories in British retail history. As chairman of the company during the period 1996–99, Norman remodelled the store along the lines of Walmart, the world's largest retailer. Executive Allan Leighton travelled to Bentonville, Arkansas to assess and photograph the systems and marketing deployed by Walmart.

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. 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.

### After purchase by Walmart

Following the takeover, Asda retained its headquarters at "Asda House". The site was officially opened in 1988, by the then Prime Minister, Margaret Thatcher. Asda previously had an assortment of seven different offices throughout Leeds, including Craven House, on the outskirts of the city in Kirkstall Road. The largest being, Britannia House, located at the converted Britannia Mills site in Morley. This was demolished along with an older Asda superstore which was rebuilt with a larger sales area on land adjacent to the old site. The new head office building brought all of the administration departments under the same roof for the first time. This new building was also 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 during the late 1980s. Asda has more recently also leased space in "The Mint" office development adjacent to the main head office site, and has taken office space as part of the redevelopment of the former Carlsberg-Tetley brewery site across the road to support its ever-growing administration and IT operations. Asda also built new Britannia House in Morley on the site of one of its old head office sites. This building is directly behind the Morley superstore, and the customer service team based at Asda's South Bank head office relocated to new Britannia House in February 2016. The Leeds grocery online home shopping centre is also located in a separate building on the Morley site.

The current Government high speed railway plans and routes, (HS2) for the country expected to be completed by 2033, will mean that the company will have to move to a new location. And, with new rail links into the city expected to be built through the South Bank area, that would mean all of the office buildings, including "Asda House" will have to be demolished.

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.

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. 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.

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

In August 2009, Walmart "sold" Asda for £6.9 billion to their Leeds-based investment subsidiary Corinth Services Limited. The deal was described as part of a "group restructuring" and meant Asda remained under the control of Walmart, since Corinth is itself a Walmart subsidiary.

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

In May 2010, Asda bought the original Netto UK supermarket chain in a £778 million deal. The deal provided the company with smaller stores that became part of the supermarket division formed in 2009, with most Netto stores being only one fifth of the size of a branch within the core Asda superstore format. 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.

In June 2016, it was announced that Andy Clarke, CEO since 2010, would be replaced by Sean Clarke, the head of parent company Walmart's operations in China. Sean Clarke officially became CEO of Asda on 11 July 2016.

Roger Burnley also rejoined the company as deputy CEO and COO (chief operating officer) in October 2016. Burnley previously worked for Asda between 1996 until 2001 and was in charge of overseeing the integration of Asda IT systems and logistics into Walmart's operations after the 1999 takeover, before joining Sainsbury's in 2002, where he remained until 2015.

In October 2017, Asda announced that the current CEO, Sean Clarke would be replaced by Roger Burnley, the deputy CEO, from 1 January 2018, and the sixth CEO since 2000.

In November 2017, Asda recruited Jesús Lorente, from French hypermarket retailer Carrefour. He became CMO (Chief Merchandising Officer), in early 2018, and is now in charge of the fresh food and general merchandise offer within all stores.

Alex Russo departed from the company in July 2018, as Chief financial officer to join general merchandise retailer, Wilko. He has been replaced by Rob McWilliam, who was a former finance director at Asda between 1997, and 2012.

## Brands and services

### Asda Money

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 offered include car insurance (provided by Brightside Insurance Services), credit cards (provided by Creation Financial Services) and travel money bureaux (provided by Travelex). 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.

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.

## See also

* 2007 UK petrol contamination
* European Marketing Distribution purchasing organization
* List of convenience stores
* List of department stores
* List of hypermarkets
* List of superstores
* List of supermarkets

## External links

* Official website

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