ASDA
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| ASDA Stores Limited
<tr><td colspan="2" style="text-align:center; padding:16px 0 16px 0;"> | |
| Type | Private |
|---|---|
| Founded | Yorkshire, England (1965) |
| Headquarters | Image:Flag of the United Kingdom.svg Leeds (head office)
<tr><th style="text-align:right; padding-right:0.75em;">Key people</th><td>Andy Bond, Chief Executive</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Industry</th><td>Retail</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Products</th><td>Grocery, General merchandise, financial services</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Revenue</th><td>see Walmart</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Operating income</th><td>£638m</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Net income</th><td>£495m</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Employees</th><td>143,125</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Parent</th><td>Wal-Mart</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Slogan</th><td>"More For You For Less"</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Website</th><td>www.asda.co.uk</td></tr> |
- This article is about a supermarket chain. For the industry group see Australian Soft Drinks Association.
ASDA is a chain of supermarkets in the United Kingdom offering food, clothing and general merchandise products. It became a subsidiary of the American retail giant 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. 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 has 150,000 employees, whom it refers to as "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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[edit] History
The present ASDA Stores Limited was founded by Laura Beth Murray as Associated Dairies & Farm Stores Ltd. in 1949. <ref>1920 to 1960 - In the Beginning. All About ASDA. ASDA (2005). Retrieved on 2006-10-15.</ref> However the formation 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 ASociated and DAiries [1].
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 Ltd, 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 to Northern Foods plc, meaning that ASDA today has no connection with the firm its name was derived from.
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.
ASDA, which then owned 229 stores, was purchased by Wal-Mart of the United States, on July 26, 1999.
Since the takeover ASDA has continued to maintain its headquarters at the then newly opened "ASDA House". ASDA House 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 from the city centre of Leeds, in the Holbeck district, West Yorkshire.
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 Patchway, near Bristol, in August 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, and at the time of writing has been followed by six further stores in Cortonwood (Barnsley), Altrincham, Byker (Newcastle-upon-Tyne), Thurrock, Essex, Glasgow and Leeds Crown Point. 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 2005, Asda expanded into Northern Ireland by purchasing 12 Safeway stores from Wm Morrison Supermarkets plc.
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 style of retailing almost like a discount supermarket like Aldi or Netto. This is seen as ASDA's response to the increasing strength of Tesco and Sainsbury's in the convenience store sector, and more Essentials stores have opened since.
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 Card
[edit] Market share
As of June 2006, Tesco has 31.1% of the UK grocery market while ASDA's share is 16.4%, followed by Sainsbury's and Morrisons. The same report from TNS Superpanel suggested that a resurgent Sainsbury's, on 16.0% (up from 15.8% in June 2005), was still the third largest supermarket, just 0.4% behind ASDA.<ref>Press Association, "Tesco's market share reaches record high", The Guardian, 2 June 2006.</ref>
It is widely expected, as predicted by former ASDA boss Tony de Nunzio in 2006, that Sainsbury's will reclaim second place at some point in the short to medium term, but this has not happened as yet.
[edit] Marketing
ASDA is known for two famous marketing campaigns. In the "ASDA price" campaign, 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. In the late 1980s prior to the introduction 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. 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. Currently in ASDA advertising is a theme featuring singing children and the previous tap of the trouser pocket advertising was reduced to a touble-tap on a stylised 'A', still producing the 'chinking' sound. This has included an advert during the 2006 FIFA World Cup featuring the England footballer Michael Owen in an advert with the children singing Vindaloo.
ASDA has been winner of the Grocer Magazine "Lowest Price Supermarket" Award for the past 9 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>"Asda made to drop low price claim", BBC, 17 August 2005.</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".
[edit] Employee relations
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 most items (exceptions include fuel, stamps, lottery, giftcards and tobacco related items) <ref>Asda Jobs: Rewards and benefits</ref>
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 "double 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. While it was intended to be a publicity stunt that improved colleague relations, it resulted in further bitter feelings due to the fact that the years previously, Music Albums, Singles, DVDs, Videos and Videogames had been included in the discount day. Beers, Wines and Spirits had also been offered with a limit of £250 in the years previous also.[citation needed]
From 2006 ASDA no longer requires job applicants to provide their date of birth, exceeding government anti-discrimination requirements. <ref>"Asda to scrap birth date queries," BBC news, [2], last accessed 6 October 2006</ref>
[edit] Unions
In August 2005, the manager of the Wakefield depot read out what were called "foreign-sounding" names over the public address system ordering them to report immediately to the manager's office. The workers, who were all Muslims, were ordered to produce evidence that they were not illegal immigrants. At least one was threatened with the sack unless he produced his passport the next day. The highly public initiative by management, which came within weeks of the 7 July bombings in London, was followed by a spate of graffiti at the depot in Wakefield expressing hatred and contempt for Muslims and their religion.<ref>Barrie Clement, "Asda managers told Asian staff to show passports", The Independent, 14 December 2005.</ref>
In February 2006, Asda were fined £850,000 for offering employees of a newly taken over distribution depot a pay rise to give up union rights. An employment tribunal found the American-owned supermarket chain guilty of promising 340 distribution staff a 10 per cent pay rise to give up the collective agreement negotiated by the GMB union – an act which is illegal under 1992 labour relations law. The court ordered Asda to pay £2,500 to each employee at the County Durham depot, but the retailer looks likely to appeal.<ref>"Asda Wal-Mart guilty of anti-trade union activity", Food & Drink Europe, 14 February 2006.</ref>
In June 2006, GMB Union members at the companies UK Distribution depots agreed to strike from five days from 30 June 2006. The two sides failed to agree on how many of Asda's 12,500 depot workers belong to the union across its 24 depots around the UK. The GMB claimed the figure as 7,000, but Asda claimed the number was nearer 4,500. The depots affected include Bedford, Chepstow, Dartford, Didcot, Erith, Falkirk, Grangemouth, Ince George in Wigan, Lymedale (in Staffordshire), Lutterworth, Portbury, Skelmersdale, Teesport, Wakefield, and Washington.<ref>"Five-day strike by Asda workers", BBC News, 22 June 2006.</ref> ASDA threatened legal action citing flaws in the ballott process, but after discussion at the TUC, an agreement was reached for a national level consultative body and the strike called off.<ref>"Asda industrial action called off", BBC News, 29 June 2006.</ref>
[edit] 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.
Since the rollout of the grocery delivery operation ASDA has moved into non-food online retailing. Current categories include entertainment, contact lenses, travel, electricals, gifts, mobile phones and flowers, with more categories being launched each year. As with the current brand proposition ASDA still focus on providing 'Always Low Prices' even in the more price sensitive online channel.
In May 2004 it announced a major expansion of the service which will increase coverage from 30% of the UK population to 35%. Recently The Grocer magazine reported an amazing turnaround in the fortunes of ASDA's Home Shopping service under new head of Home Shopping, Richard Ramsden. More recently ASDA stepped up its comittment to Home Shopping focusing on full UK coverage by the end of 2007. Andy Bond highlighted that ASDA will be recruiting up to 1,800 to bolster its operations and focus on catching Tesco in the online arena.
[edit] George clothing
ASDA has its own range of clothing known as George. This is marketed as quality fashion clothing at affordable prices. Wal-Mart also sells the George brand in Germany, the United States, Canada and South Korea. In the mid 2000s the brand was extended to a range of standalone George stores on the high street. The George label is named after George Davies, founder of Next, who went on to set up the Per Una clothing business for Marks & Spencer.
In 2005, ASDA stated that the George range was a £1.75 billion business, including sales from Wal-Mart stores in the US and Germany. Mintel estimate that George is the fourth largest retailer of clothing in the United Kingdom, after Marks and Spencer, the Arcadia Group and Next<ref>Mintel Clothing Retailing - UK, July 2005</ref>.
Staff at ASDA House, its Leeds headquarters, are asked to take part in what is called 'George Day', a non-uniform day when they must wear at least one item of 'George at Asda' clothing.
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>"Supermarket unveils £60 wedding dress," Telegraph.co.uk, [3], last accessed 6 October 2006</ref>
[edit] ASDA Financial Services
ASDA has established a financial services division, following in the footsteps of Sainsbury's, Safeway and Waitrose. As with these supermarkets, 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 GE Capital Bank) and loans (provided by The Funding Corporation).<ref>Sarah Butler and Christine Seib, "Asda ends Scottish Widows tie-up," The Times [4], last acessed 6 October 2006</ref>
[edit] 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
[edit] Controversy
In 2006, a group of labour rights organisations argued that as part of one of the world's larget companies, ASDA is in a position to influence the fashion industry to ensure higher standards for workers throughout the supply chain. 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 vaires 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 going elsewhere.<ref>Clean Up Fashion; Asda Walmart, Page retrieved 23 November 2006.</ref>
[edit] See also
[edit] References
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[edit] External links
| Wal-Mart Stores, Inc. |
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Key People: Sam Walton | David Glass | Lee Scott | Jim C. Walton | Bud Walton | S. Robson Walton | Douglas Daft |
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Assets: Amigo Supermarkets | ASDA | Sam's Club | Wal-Mart Discount Stores | Wal-Mart Neighborhood Market | Wal-Mart Supercenter | Walmex |
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Annual Revenue: $288 billion USD (Image:Green Arrow Up.svg10% FY 2005) | Employees: 1.7 million | Stock Symbol: NYSE: WMT | Website: www.walmartstores.com |
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| Convenience stores: |
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| Frozen foods: |
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