Asda is planning to open 300 convenience stores and create 10,000 new jobs in the next four years as it tries to grab a bigger share of the grocery market and potentially overtake rival Sainsbury’s to become the UK’s second largest supermarket.
The retailer, which is controlled by the billionaire Issa brothers and private equity firm TDR Capital, currently has just two Asda Express stores – in Sutton Coldfield, near Birmingham, and Tottenham Hale, in north London.
It has already said it plans to have 30 by October next year and has now laid out a much bigger ambition. The 300 planned Asda Express sites will be in addition to the 132 convenience stores the group is acquiring from the Co-op.
Mohsin Issa, Asda’s co-owner, said: “A key part of our growth strategy is to provide customers with more opportunities to shop at Asda closer to where they live or work. With more than three-quarters of the UK population visiting a convenience store in the last 12 months, the potential for growth in this market is significant. Our ambition is to become the convenience destination of choice by providing shoppers great value and a comprehensive and convenient range of products and services under one roof.”
The shift into convenience stores in residential areas comes after EG Group, which is also owned by the Issas and TDR, said it planned to open 200 Asda On the Move convenience sites on its petrol forecourts.
Asda has historically focused on large stores. It made a foray into smaller sites in 2010 when it bought Netto’s 200-strong UK chain for more than £750m but these outlets are much larger than the planned Asda Express stores.
If the group realises its plans, it will have a similar number of Asda-branded convenience stores to Sainsbury’s, which has 800 small stores as well as its major supermarkets, but leave it well behind Tesco, which has almost 2,000 Express stores and 700 One Stop outlets.
The busy market also includes Little Waitrose and the Co-op which vie for custom with the likes of McColl’s and thousands of independents, many of which trade under brands such as Londis, Spar and Budgens.
Morrisons, the UK’s fifth largest supermarket behind Aldi, has been expanding into the market, supplying independents under the Morrisons Daily banner, after an abortive attempt in 2015 to run its own convenience store chain, M Local.
Amazon has, meanwhile, tested several checkout-free Fresh stores, where shoppers can pay via a phone app, but has paused expansion in the UK where it appears to have struggled to win over shoppers.