LEEDS-based supermarket chain Asda today said it planned to place “non-essential expansion” on hold as it concentrates on improving its core business.
Asda has launched “Project Renewal”, which is an update to its five year strategy. It said it is “prioritising investment to better address the fast changing needs of its customers in today’s market”.
In a statement Asda said: “This 18 month project will maintain and extend Asda’s everyday low price, value competitive position, further increasing its price advantage over major competitors and strengthening its competitive position against the discounters.
“Key elements in the programme will be concentrating on efficiency and service in its core business, addressing the need to invest in re-modelling some of its larger stores, prioritising development spending on areas central to customer needs and putting other non-essential expansion on hold.”
Asda will accelerate existing plans to invest in 95 stores while, at the same time, temporarily slowing down planned expansions in London as well as its programme to develop more stand-alone petrol stations.
It will re-phase existing plans to develop remote Click and Collect sites and will continue with the opening of two new “dark stores” in Dartford and Heston due to open in 2016.
Non-core areas such as Asda’s Business to Business sales operation will permanently close in the next few months.
The Asda statement added: “The outcome will be a further simplifying and managing of Asda’s cost base and the laying of an even stronger platform from which to project future initiatives to deliver improving value and lower prices.”
Speaking to colleagues earlier today, Asda President and CEO, Andy Clarke, said:
“Asda is a strong and profitable business which has built its success on delivering everyday low prices and good value to customers through efficient, friendly and well-managed stores, This is a winning strategy and we are determined to stick with it,
“Over the last two years, we have shown that we are ready to make necessary and early changes to match that ambition to the demands of our customers, especially at a time when the market is clearly undergoing permanent and rapid structural change.
“We need to simplify what we do by prioritising the first line of our strategy – improving our core business - and pausing activity in other areas so that we are not spread too thinly.
“We started that journey today with our colleagues and over the coming weeks we will work on the detail in partnership with our suppliers.”