Asda Convenience Push Puts Fresh Food At Heart Of Battle For Independent Retail

Asda is making a fresh move into Britain’s £50 billion convenience sector, with a new wholesale model that could see its own-label, chilled and fresh food ranges appearing in independently operated stores.

The supermarket has launched Asda Convenience, a format designed specifically for independent retailers, with an initial three-store trial in Scotland in partnership with convenience operator One-O-One. Unlike Asda Express, which is owned and run by Asda, the new stores will be operated by independent retail partners under the Asda Convenience fascia.

Each trial store is expected to offer around 3,500 products, including Asda own-label lines, fresh and chilled groceries and food-to-go. Subject to the success of the trial, Asda has said the model could potentially expand to up to 50 additional stores this year.

For the fresh produce and chilled food sectors, the development is particularly significant because Asda is positioning its supermarket expertise in fresh food as one of the potential strengths of its convenience offer.

Joseph Sutton, Asda Express, Fuel & Wholesale Director, told Asian Trader that convenience and wholesale represented important growth channels for the retailer.

“Launching Asda Convenience is a natural next step as we look at new ways to bring Asda’s value, own-brand range and fresh food offer to more customers,” he said.

Asda says it is initially looking to work with established multi-site independent operators, particularly those seeking to develop categories including fresh food, core grocery and own label.

The strategy comes as convenience retail continues to evolve beyond the traditional top-up shop. Fresh, chilled, meal solutions and food-to-go are becoming increasingly important to the sector, giving supermarket operators with established fresh supply chains a potential advantage.

TWC Development Director Tom Fender said that while wholesale-supplied convenience stores traditionally have considerable strength in impulse and established convenience categories, shoppers are increasingly seeking fresh, short-life and chilled products.

He suggested Asda’s established fresh food credentials could therefore prove a differentiating factor as it enters the market.

The move also puts Asda into a market where several of its supermarket rivals already have significant interests. Tesco owns Booker, Co-op operates Nisa as part of its wholesale proposition, while Morrisons has developed an estate of more than 1,700 Morrisons Daily stores, around 700 of which operate under its franchise model.

That means the battle may be as much about winning independent retailers away from existing wholesalers and fascia groups as it is about competing directly with other supermarkets.

Asda is expected to invest more than £2 million in the project by the end of this year. The trial stores are also expected to offer facilities including food-to-go counters, Costa Express machines, parcel storage and reverse vending machines.

The biggest test will be whether Asda can successfully translate the scale and supply-chain capabilities of a major supermarket into the smaller, more complex environment of independent convenience retail.

But with fresh and chilled food becoming an increasingly important part of the convenience proposition, Asda’s arrival adds another potentially powerful player to a market in which quality, availability and fresh-food expertise are becoming every bit as important as the fascia above the door.