As part of its ambitions to open 300 convenience stores over the next four years, Asda opened its second Express format site at Tottenham Hale in London.
Asda’s chief transformation officer Mark Simpson explains to Convenience Store how the business developed the new format and what it hopes to bring to the channel.
The 3,000sq ft Express stores will carry around 3,000 SKUs although the Asda team has tailored each one to the location’s customer base. “Our first Express format store in Sutton Coldfield - that’s more residential so a different customer base surfaces,” says Simpson. “There are lots of students around here so we have a different range available.
“There’s a few common skus. But it is a very different range for what we’ve deployed to in Birmingham. And it’s early days, so we’ll test and learn. This location is more food for now as you come into the store. It’s got less of the food cupboard lines in here compared to what we’ve got at Sutton Coldfield.”
The store’s location near Tottenham Hale station places it just yards away from a Tesco Express site. Does that concern Simpson? “No, we’ve got confidence in the format that, especially as the second one we’re opening is essentially 20 yards away from a competitor. Bring it on.”
Community engagement is one of the USPs of independent retailing, can Asda realistically compete on this? Simpson believes so. “Whenever we put a store down, we want to be a pillar of the community. We’re a big well-known brand so we’ll do what we can to help support this.”
Simpson says Asda took inspiration from various parts of the convenience sector while retaining the brand look.
“I suppose we’ve learned from the rest of the convenience marketplace but tried to make it distinctly Asda so you know is hopefully you can tell it’s us when they walk in the door,” he says. “We’ve also partnered with EG Group as they’ve been working with smaller store formats for a while.”
Asda plans to create 10,000 jobs in 300 Express stores over the next three years, and has 25 staff working at the Tottenham Hale site. With this level of store numbers planned for the format, could Asda follow other operators to create a franchise model?
“I won’t rule it out but at the moment we’ve got no current plans for it,” says Simpson. ”We are concentrating on this format going forward and our partnership with EG Group.”
Simpson explained why Asda is aggressively targeting the convenience channel. “Even with our market share, only 25% of people can get within five minutes of the master. So there’s still, even with a saturated market, lots of opportunity, we think to lay down more footprint in the UK. We’re really underrepresented in London in the southeast.”
Simpson said Asda was still new to the channel but had high hopes for success.
“We’ve not been in a convenience game at all - this is only our second month with this Express format. So it was quite a quite a big deal for us to go to open stores or sites after years of not opening shops. It’s great to be on second one with a plan to open plenty more next year.”
He attributes a hesitancy to get into the UK convenience sector to Asda’s previous owners, Walmart.
“We had a great relationship with Walmart but the new owners are good fit for us. There’s lots of great opportunities with great ROI compared to probably what Walmart thought was quite a saturated UK market.
“There’s loads of opportunity for small sites like this [Tottenham Hale] to put the Asda proposition down, where in the past, we didn’t have the desire to do it but under our new owners, it’s all about growth for us.”
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