Asda said it will open its first convenience stores before the year-end as it looks to overtake J Sainsbury PLC (LSE:SBRY) and close the gap with Tesco PLC (LSE:TSCO).
Having agreed in August to acquire 129 convenience stores on Co-op petrol forecourts, Britain’s third-largest supermarket will open its first shops under the Asda Express brand in Tottenham Hale in London and in Sutton Coldfield in Birmingham, followed by another 30 sites next year.
With the Midlands store to open on 8 November and the site in the capital on 6 December, the staged openings are part of a ‘test and learn’ approach, the grocery group said, a “key element of Asda’s strategic vision to become the UK’s second-largest supermarket.”
According to the most recent industry data from Kantar, Asda was the third largest British grocery group with 14.3% of the market, while Sainsbury's had 14.7% and Tesco 27%. Next in line were Aldi with 9.3%, Morrisons with 9.0% and Lidl with 7.1%.
Mohsin Issa, Asda’s co-owner, said the two new openings were “a landmark moment" for the business. “We’re confident customers will find everything they need in these stores and enjoy the convenience of having a new type of Asda store on their doorstep.”
Asda said it expected the organic openings would create approximately 500 new jobs.
Seven weeks ago, Asda agreed to pay £438mln to snap up the Co-op's petrol stations business, saying its convenience stores will "create a new and distinct format" in this corner of the market.
The Co-op transaction is expected to be completed at the end of October but may be hampered by a review by the Competition and Markets Authority.
A media report suggested Asda may have to sell off around 10% of the forecourt sites in order to meet competition requirements.