Supermarket chain Asda was transformed during the 1990s from one of the UK's drabbest retailers into a real powerhouse, nibbling at the heels of top dogs Tesco and Sainsbury. That process was capped by its acquisition in 1999 by US goliath Walmart, becoming that group's biggest international subsidiary. It overtook the then-ailing Sainsbury in 2003, and retained that lead for more than a decade, successfully widening its offering with enormously successful clothing brand George, now the UK's leading clothing label by volume and one of the top three by value. However, top-ranked retailer Tesco remained beyond Asda's reach, though the acquisition of smaller rival Netto in 2010 helped to close the gap a little. The brutal competition on prices against discounters Aldi and Lidl took its toll on Asda more even than on its competitors in 2015, and towards the end of the year it finally surrendered the #2 position back to a resurgent Sainsbury. Asda has spent more than four years since then to regain the #2 position, so far without success. In 2018, Walmart even accepted an offer from Sainsbury's to merge the two businesses, but after a full year of review the merger was blocked by competition regulators in April 2019. In 2020, Walmart announced a strategic review that could lead to the sale of a majority stake in Asda to a third party. A deal was finally concluded in Oct 2020 with the sale of majority control to entrepreneurs Mohsin & Zube Issa backed by TDR Capital. A series of senior Asda executives have moved on and up to Walmart in the US over the past decade. Current CEO is Roger Burnley. Asda has around 14.5% share of the UK grocery market in 2020, four or five percentage points behind Sainsbury's As of Jan 2020, there were 631 stores in the UK. Traditionally, Asda is strongest in the North of England, where it originates and is still headquartered, but it now has a fully national footprint. For the year to Jan 2020, Walmart declared net sales for the UK of $29.2bn. Statutory accounts for Asda Group for 2018 showed revenues of £22.9bn and net profit of £710m.
Capsule checked 11th March 2020
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Historical profile information for Asda
Adbrands Daily Update 14th Oct 2020: Even before completion of its buyout from Walmart, Asda has continued to roll out a bold new "store within a store" strategy. It has announced plans to test branded concessions in-store for home improvement giant B&Q in four larger supermarkets, and this week agreed a partnership with toy retailer The Entertainer. Under this arrangement, The Entertainer will take over the management of an enlarged toy offering in five stores from Feb next year. Asda already has similar concession ventures with accessories retailer Claire's - now in 15 stores - and with secondhand DVD distributor MusicMagpie, now being expanded to more than 30 outlets.
Adbrands Daily Update 5th Oct 2020: After a protracted search, Walmart finally found a buyer for its UK supermarket Asda. Though it will retain an as yet undisclosed stake in the business, majority control is to be acquired by brothers Mohsin and Zube Issa in partnership with private equity investor TDR Capital. It has not yet been disclosed precisely what holdings the Issas, TDR and Walmart will end up with, but the arrangement values Asda at £6.8bn. That's less than the valuation in Walmart's books: the retail giant will take a $2.5bn net loss on the sale. The Issa brothers are the owners of convenience store and garage forecourt operators EG Group, which they built up from one single outlet to a global empire of 6,000 sites with revenues of €20bn. Combined sales of Asda and EG Group will be £40bn, making the business the UK's second biggest retailer after Tesco.
Adbrands Daily Update 27th Feb 2020: With Asda still stuck firmly in third place in UK groceries behind Tesco and Sainsbury, parent Walmart has begun to investigate the disposal of a majority stake in the business. "Following inbound interest," the company announced this week, "Walmart and Asda can confirm that we are currently considering whether there is an opportunity for a third party to invest in Asda, alongside Walmart, in order to support and accelerate the delivery of Asda's strategy and position Asda for long-term success." Another alternative would be floatation. "Walmart firmly believes that an IPO is an attractive long-term objective for Asda. Asda is a great business with a clear strategy for the future and Walmart is committed to ensuring it has the resources and support it needs to deliver that strategy." An attempt to merge Asda with Sainsbury was blocked last year by regulators.
Adbrands Daily Update 7th Jan 2020: American marketer Andy Murray, parachuted in by Walmart to take charge of Asda's marketing after it was displaced as the UK's #2 supermarket by Sainsbury's, is to return stateside. His mission remains unaccomplished: Asda still sits in 3rd place. Murray's successor as chief customer officer is Anna-Maree Shaw. It's one of several changes announced by CEO Roger Burnley in a complete overhaul of the UK management team. Asda also has a new COO in Anthony Hemmerdinger, as well as new CFO, supply chain officer and chief merchandising officer.
Adbrands Social Media 6th Aug 2019: "Playground Monster". Back to school already? They only just broke up! Here's proof that some of the best creative ideas come from kids, not just copywriters. For the its new Back To School clothing campaign for supermarket Asda's George label, AMV BBDO asked real kids to pick their favourite playground game, and then suggest their ideas for the perfect monster. Of course, it took copywriters to forge an ad out of what was probably a deluge of crazy ideas. The results are fantastic. Definitely the best playground monster we've seen this year.
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