Convenience stores

Asda to launch Express convenience stores | Asda

Asda opens its first convenience stores outside a petrol station as its new owners seek ways to expand the UK’s third-largest supermarket chain and overtake Sainsbury’s.

The two Asda Express stores – in Sutton Coldfield, near Birmingham, and Tottenham Hale, north London – will open before Christmas with 30 locations planned over the coming year.

Asda said it hoped to capitalize on an expected 13% rise in the convenience store market by 2027 to £50bn with a bid to overtake Sainsbury’s to become the UK’s second-biggest grocer.

Sainsbury’s has been in second place since 2019 but is less than 1% ahead of its smaller rival in terms of market share, according to Kantar analysts.

The two, who were prevented from merging by Britain’s competition watchdog three years ago, have long been in contention for second place.

The shift to convenience stores in residential areas came after new Asda owners EG Group announced plans to open 200 Asda On the Move convenience store locations on its oil forecourts. Asda is also acquiring 132 co-op convenience stores.

Asda has historically focused on department stores. He made a foray into smaller supermarkets in 2010 when he bought the 200-person UK chain of Netto for over £750m, but those outlets were much larger than the Asda Express stores planned.

Asda is belatedly entering a highly competitive arena, in which Tesco’s Express and One Stop chains, Sainsbury’s Local, Little Waitrose and the Co-op vie for custom with McColl’s and thousands of independents, many of whom trade under brands such as Londons, Spar and Budgens.

Morrisons, the UK’s fifth-largest supermarket behind Aldi, has expanded into the market, supplying independents under the Morrisons Daily banner, after a failed attempt to run its own convenience store chain, M Local, in 2015 Amazon has, meanwhile, tested several Fresh stores without checkouts, where shoppers can pay through a phone app.

Grocery fast delivery services such as Gorillas, Getir and GoPuff have also been touted as major competitors to convenience stores, but several have either closed, laid off workers or sold out to rivals as investors balk at continuing to fund new businesses. heavy losses.

Venture capital investment in fast food companies has more than halved so far this year, from $7.6 billion globally to $3.6 billion, according to the research firm Financial Pitchbook.

Shoppers have turned to smaller local stores during the Covid pandemic, creating a convenience boom, but outlets have come under pressure as households seek bargains at hypermarkets and discounters.

Mohsin Issa, one of the billionaire brothers who bought Asda with private equity group TDR Capital two years ago, said: “The launch of our first two Asda Express convenience stores is a milestone moment for our great company and a key step in our journey. to bring Asda to more customers in more communities across the UK.

“The stores have been designed to meet a wide range of customer needs, whether it’s picking up a pint of milk, grabbing a quick lunch or buying the fresh ingredients to cook dinner. from zero. We are confident that customers will find everything they need in these stores and enjoy the convenience of having a new kind of Asda store on their doorstep.

Asda said its Express stores, which will be around 3,000 square feet, will stock around 3,000 products, including hot and cold takeout from its own brands, including Leon. The stores will also offer a fast delivery service through Uber Eats.