Asda suffers from Netto takeover and petrol prices | RetailDetail

Asda suffers from Netto takeover and petrol prices

Asda, Walmart's British daughter, has experienced a slower second-quarter growth due to higher prices for petrol – causing fewer consumers to turn up at their stores. “Economic indicators show that 2011 will be a challenging year for the British consumers, but we are convinced that both Asda and the renewed Netto stores will be well equipped to start the second half of the year.”, says Doug McMillon, president of Walmart International.


In the second quarter of this year, the like-for-like turnover went up 0.5%, slightly less than the 0.8% of the first quarter. The operational turnover suffered from the £19 million Asda paid for a part of discount chain Netto and the fact that the number of consumers visiting one of the stores dropped 1.2%.

 Changed consumer perception

Particularly worrisome for Asda is the changed perception amongst British customers: much like their American counterparts, they think that Asda/Walmart is too expensive and choose for hard discounters like Aldi or Lidl instead. Asda's market share dropped 16.7% in the twelve weeks ending on 7 August, according to Kantar Worldpanel's market survey.

Successful Netto takeover

Asda's new strategy focuses on convenience stores of between 450 and 2500 m², of which it hopes to open 250 new instances in the next three years. This strategy was inspired by the success of renewed Netto stores after their takeover by Asda: they witnessed an average sales growth of over 50%.

“At first, we wanted 100 additional new stores of this smaller size, but due to the success of the first few stores, we have decided to raise that number to 250 at least”, says Asda-chairman Andy Clarke. The Daily Maile quotes further: “Next week, the 100th renewed Netto opens its doors, a highly successful endeavour because of its prices, quality and service.” The price policy is remarkable indeed, as the groups maintains the same prices in the larger Asda stores as in the small Netto ones.

Asda, Walmart's British daughter, has experienced a slower second-quarter growth due to higher prices for petrol – causing fewer consumers to turn up at their stores. “Economic indicators show that 2011 will be a challenging year for the British consumers, but we are convinced that both Asda and the renewed Netto stores will be well equipped to start the second half of the year.”, says Doug McMillon, president of Walmart International.


In the second quarter of this year, the like-for-like turnover went up 0.5%, slightly less than the 0.8% of the first quarter. The operational turnover suffered from the £19 million Asda paid for a part of discount chain Netto and the fact that the number of consumers visiting one of the stores dropped 1.2%.

 Changed consumer perception

Particularly worrisome for Asda is the changed perception amongst British customers: much like their American counterparts, they think that Asda/Walmart is too expensive and choose for hard discounters like Aldi or Lidl instead. Asda's market share dropped 16.7% in the twelve weeks ending on 7 August, according to Kantar Worldpanel's market survey.

Successful Netto takeover

Asda's new strategy focuses on convenience stores of between 450 and 2500 m², of which it hopes to open 250 new instances in the next three years. This strategy was inspired by the success of renewed Netto stores after their takeover by Asda: they witnessed an average sales growth of over 50%.

“At first, we wanted 100 additional new stores of this smaller size, but due to the success of the first few stores, we have decided to raise that number to 250 at least”, says Asda-chairman Andy Clarke. The Daily Maile quotes further: “Next week, the 100th renewed Netto opens its doors, a highly successful endeavour because of its prices, quality and service.” The price policy is remarkable indeed, as the groups maintains the same prices in the larger Asda stores as in the small Netto ones.

Questions or comments? Please feel free to contact the editors


Adidas wants to strengthen bond with small retailers

15/07/2018

German sportswear giant Adidas says it wants to strengthen its bond with small-scale retailers after they claimed Adidas is too aggressive in pushing its web shop, especially as they feel the brand is favouring large international chains as well.

Several candidates to take over Men at Work

12/07/2018

There are several takeover candidates for both the Dutch and the Belgian stores of the bankrupt clothing chain Men at work. The curator is confident an agreement should be reached today in Belgium.

Burberry sales increases thanks to new strategy

11/07/2018

The new strategy of the British fashion brand Burberry starts to render: the company had a 3% increase of revenue in their own stores last quarter. In total, Burberry has now a revenue of 479 million pounds (520 million euros).

FNG moves to Brussels stock exchange

06/07/2018

Belgian fashion group FNG has collected 60 million euros by issuing new shares. The new shares will be traded on the Amsterdam Stock Exchange and - for the first time - on the Brussels Stock Exchange as well.

Athleteshop ends its run

02/07/2018

Dutch sports web shop Athleteshop has filed for bankruptcy, after an abysmal year in which strings of complaints led to all sorts of problems. Social media and review sites were flooded with customers complaining about late deliveries.

Alibaba goes Turkish with stake in Trendyol

29/06/2018

Alibaba is the new strategic partner of Trendyol, one of the best-known e-commerce companies in Turkey. With this partnership, the Chinese retailgroup strengthens its presence in Europe.