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ASDA pilots new store format

ASDA is to trial a new store format focusing on fresh food, homeware, health and baby with a reduced emphasis on goods that sell well online.

The trial, which will take place in three stores in Grantham, Coventry and Colney, will see the removal of white goods, electricals and other products which are popular online in order to make more space for goods that sell well in stores.

Asda’s CEO Andy Clarke said that if the store trial works, the Leeds-based group will renew its estate based on the new format.

“We are reviewing our large store portfolio and are trialling a new proposition that will land by the end of the year. We’ll open three stores in the last quarter of this year,” he said.

“There are clear areas of our business which are switching to online, such as white goods and electricals. We are leading on ‘Click and Collect’ whether it’s from a locker or a van. We are changing the space in stores.

“The new proposition stores have to combine the relationship between digital and physical. If it works we’ll renew our estate based on these proposition stores. They are the stores of the future.”

Retailers are having to adapt to cater for the massive increase in demand for online shopping.

While customers still want to go into stores to choose their fresh fruit, vegetables and meat, they prefer to shop online for mobile phones, laptops, tablets, fridges, hoovers and other big, heavy goods.

Mr Clarke said that the George clothing range will retain a strong presence in stores as shoppers still like to try on clothes before they buy them.

The average size of the three test stores is 50,000 sq ft.

It is understood that the new stores will feature fresh food at the entrance rather than the usual George range.

“What we’re doing at these stores is going on a journey with our customers and finding out what services and experiences can help save them time and money, for example the Barclays banks in store and in store order points giving customers access to our entire range,” said a spokeswoman.

“We’re in early stages of the development so there isn’t anything to see at these stores quite yet.”

Asda is the only supermarket in the big four to see underlying sales growth at the moment. The group reported a return to growth in 2014 after strong Easter trading boosted underlying sales.

Like-for-like sales rose 0.1 per cent in the 15 weeks to April 20, showing an improvement over the Christmas quarter when sales slipped by 0.1 per cent.

The figures are in sharp contrast to arch rival Bradford-based Morrisons, which reported disappointing Easter sales after shoppers deserted its stores in favour of cheaper prices at discount rivals Aldi and Lidl.

Morrisons reported a 7.1 per cent slump in underlying sales in the 13 weeks to May 4.

Asda said that the modest rise in sales showed that its five-year plan to spend £1bn on cutting prices is working.

“There are winners and there are losers and from our numbers it’s clear we’re winning,” said Mr Clarke.

“Our strategy is working. We’re certainly performing ahead of Morrisons, Sainsbury’s and Tesco.”

Asda’s finance director Alex Russo said the group’s Easter performance was ahead of the market.

He added that double digit growth on Easter lines was driven by a 12 per cent bigger shopping basket over the Spring holiday period.

Mr Clarke said that over 18 months ago Asda recognised the beginnings of a structural shift in the retail market – namely the rise of the discounters. Asda has frozen prices on over 80 products such as cucumbers at 50p.

Source : Yorkshire Post
www.yorkshirepost.co.uk/business/business-news/asda-to-trial-new-sales-format-in-its-stores-1-6663073

10 June 2014
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