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


Martin Winkler is Falke Group’s new CEO

19/07/2017

Falke Group, known for its leg fashion brand Falke, announced Martin Winkler will become its new CEO, succeeding Uwe Bergheim, who will retire.

Marc O’Polo gets new CEO

19/07/2017

Current fashion brand Marc O’Polo CEO, Alexander Gedat, will step down on 31 August and Dieter Holzer will succeed him. He has plenty of experience as a leading figure in the fashion industry.

Multiple companies interested in Jimmy Choo

19/07/2017

Luxury shoe brand Jimmy Choo is attracting several interested buyers, apparently including Michael KorsInterparfums and Hony Capital.

Puma increases profit forecast again

18/07/2017

For the second time this fiscal year, German sports brand Puma increased its profit forecast. A strong first quarter prompted the first adjustment and this second quarter was also above expectations apparently.

C&A divest from Russia

18/07/2017

Textile chain C&A will fully divest from Russia. It currently collaborates with Russian Trade Group to manage its local store network, but it has pulled the plug on that deal. Mexx has also decided to shut down every Russian store.

Zalando reveals Prime-like subscription service

18/07/2017

In the second quarter of 2017, web shop Zalando’s turnover did not grow as much as it did in previous quarters, according to the company’s preliminary results. Zalando also announced a new subscription service.

Back to top