Essay on LongPest Analysis of ASDA Superstores

As Asda is a public limited company its shares can be sold to the public by selling its stock. Asda’s purpose is to supply goods of a certain quality to customers and as well earn money to stay in the retailer’s competition which include Tesco, Sainsbury’s and Morrison’s. Asda is a national organisation founded in 1948 by J.W. Hindell however was took over by the retail corporate giant in America, Walmart, after a £6.7 billion takeover in July 1999. Asda’s current owner since 2016 is Sean Clarke. Asda is solely in the tertiary sector as it provides a service/product to its consumers for example vegetables and meat.

Asda is a variety retailer stretched over numerous sectors, which include, entertainment clothing and footwear. It is considered a multi-channel retailer, with a blend of store locations and growing online presence.

ASDA is one of the biggest buying company that sells food and clothes to customers.

Asda is one of the biggest British Supermarket Retailer Store in the UK; there are approximately 180,000 employees and has an operating income is estimated to be over 1 billion. Asda started at 1949 (68 years ago) and has currently around 631 stores (as in January 2017), the Asda headquarters are located at the Asda House, on the South Bank, Leeds,

There has been speculation that Wal-Mart/Asda was interested in taking over the Safeways chain of stores. Eventually this takeover did not happen, but it did raise concerns. If the takeover had gone ahead, Wal-Mart/Asda would have become so big, that it would have dominated the market and no other retailer would have been able to compete with them. The cost of this could have been the flooding of the UK with cheap low quality goods from China, an overreliance of Wal-Mart/Asda, and an acceptance of cheap low quality goods by the UK population. Additionally it would have limited the UK consumer’s choices and would have affected people’s jobs as business down-scaled or closed down, as they could not compete with the Wal-Mart/Asda economy of scale.

ASDA is the second largest retailer in the UK, and it has been part of WAL-MART family of companies since 1999. ASDA scales can be valued by the number of stores it runs as well as how money people work for them. For example it has 321 stores in UK and North Ireland, 29 depot and more than 148000 employees. These all help to generate more than £15bn turnover.

The stores of Wal-Mart are the biggest retail company that operates within the United States of America. The company has received the first position in the Fortune 500 Index Fortune Magazine for a substantial number of years. The company has managed to embrace a distinct corporate strategy whose goal revolves around dominance into the already existing retail market. There has also been an increase in the manner for which expansion activities of the business are conducted. Numerous ventures have been made into the United States, as well as other international markets.

We all know Tesco as a food retailer, and we know that they are in constant competition with other retailers such as Sainsburys and Asda, yet we do not know much about what goes on beyond the shelves and the tills, the marketing plans and the day to day tactics that have to be devised to stay the number one food retailer in the United kingdom today.

The parent company’s, Wal-Mart’ strategy involved opening up non-food sales areas for its clothing brands, ‘George’. This lead to an increase in profit of 25% in non-food sales, which was unachievable by their competitors due to the shortage of space on their premises. As well as clothing Asda has started to expand into services such as pharmacy, holiday, optical and car rental services at very competitive rates never offered previously on the UK market. With high expectations for the following year Asda focused on increasing their discount clothing line even targeting Matalan to have a higher turnover. However they fell short of hitting their target twice in the same year, which was a ‘wake-up call’ for Wal-Mart showing that a different strategy will be needed and not everything that works in the US will work in other countries.

Asda is a British supermarket chain which was built in 1949 (Asda, 2016). In 1999, Asda joined to Wal-Mart (Asda, 2016). “To be British’s best value retailer exceeding customer needs, every day” and “Saving you money, every day” are the mission and objective of Asda respectively (Business Case Studies, 2015). Asda developed low-price strategy and always performed for achieving the mission and objective and getting competitive advantages.

Demographic changes such as the aging population, an increase in female workers and a decline in home meal preparation mean that UK retailers are also focusing on added-value products and services. In addition, the focus is now towards; the own-label share of the business mix, the supply chain and other operational improvements, which can drive costs out of the business. National retailers are increasingly reticent to take on new suppliers (Clarke, Bennison and Guy,1994; Datamonitor Report, 2003).

The chain, which has now 179 stores in the UK including concessions, said retail sales were up 15.4 per cent in the 28 weeks to August 11. The upbeat performance implies like-for-like sales growth of around 3 per cent.

In the year of 2014, there was a great growth of the retail industry in U.K, which increase 4.3% of the quantity bought in this industry (Office for National Statistics, 2014). However, with the development of some discount chains in the U.K marketplace, the business of Tesco definitely has faced some challenge. Especially, Aldi?s and Lidl?s could be considered as two examples that have a great growth of their market share through their low-price marketing strategy.

Wal-Mart Stores, Inc. the World’s largest retailer, has a bullseye on its back in all different directions from supermarkets cutting prices to match Wal-Mart’s price, to Costco leading the warehouse market and online retailer beating out Wal-Mart.com. In addition, 2008 brings an economic slowdown and reduction of feet through the doors of Wal-Mart Stores. Added to this, Wal-Mart has received negative publicity relating to employee compensation and benefits, forcing pricing challenges for suppliers resulting in the loss of U.S. jobs and opening stores putting locally owned retail outlets out-of-business. Wal-Mart has over 6,8001 stores worldwide with a strong internet presence supported by over 66,000 suppliers.

A crucial change has occurred in shopping habits of UK population in recent years. People tend to satisfy more of their needs in one place and in shorter time it shows a necessity for large chains to expand their services into new non-food markets. Consumers now keep on eye on fair trade and the influence of developed countries consumers on 3rd world supplies. In 2005 Tesco had the largest range of fair traded products in the UK.