Asda Case Study

Case Study of ASDA

In 2009, with a turnover of £19,819 million and 168,666 employees, ASDA was ranked the second largest supermarket chain in the United Kingdom (U.K). Positioned as value for money store, it operated 371 superstores and sold groceries, videos, CD’s, apparels, books, and other household items. ASDA was taken over by the U.S retail giant Wal-Mart in 1999 and has since been focusing on Every Day Low Pricing (EDLP) and adopted Wal-Mart’s known ‘pile it high, sell it cheap’ strategy to push itself aggressively in U.K retail market. The strategy which enabled ASDA to increase its customer base as well as profit, worked well during the recession but according to latest figures which shows an increase in sales but ASDA is still losing ground on its major rivals, with a fall in market share, as competition increases. In May 2010, according to the latest grocery industry figures from Kantar Worldpanel, ASDA was the only one of the ‘top four’ to have suffered a fall in its market share from 17 percent a year ago to 16.8 percent. ASDA has taken several steps and launched several initiatives to tackle this situation and expanded its non-food offerings to increase its growth.

Background

ASDA was built up from a Yorkshire based dairy collective in 1965 by J.W Hindell. With only around 60 stores in 1978 across the northern part of the country which sold a wide range of products ranging from food to non-food items at low prices and two years after ASDA crossed the £1 billion sales mark. In 1989, ASDA opened its first outlet in south Britain in an effort to strengthen its clothing segment to compete with Mark & Spencer’s. It also launched its own private clothing label called George in year 1990. Following its expansions, ASDA had put lot of pressure on its financial resources and soon its existence was questioned and threatened and at that point debt-ridden ASDA was looking for a savior that would give it an advantage in the industry and an...