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Now ASDA, the UK’s second largest supermarket, presents ASDA.com offering a wide range of products and services including: CDs, DVDs, Games, Contact Lenses, Flowers, Gifts and Photo. It became a subsidiary of Wal-Mart in 1999, and is currently the second largest chain in the UK after Tesco. ASDA is Wal-Mart's largest overseas subsidiary, accounting for almost half of the company's international sales. As of January 2006, there were 21 ASDA/Wal-Mart Supercentres, 243 ASDA Superstores, 37 ASDA Smaller/town centres, 5 ASDA Living stores, 10 Georges, and 24 depots (distribution centres). ASDA employs 150,000 "colleagues" (90,000 part-time, 60,000 full-time).
ASDA was founded in 1965 by a group of farmers from Yorkshire. The name is an abbreviation of Associated Dairies. For a short time in the 1980s Asda Stores Ltd was a subsidiary of ASDA-MFI plc follwing a merger between the two companies. Other companies in the group were Associated Dairies Ltd, the furniture retailer MFI and Allied Carpets. After the sale of MFI and Allied the company name changed to ASDA Group plc. The dairy division was sold to Northern Foods plc. The company went through a troubled period in the early 1990s, but was then revived under the leadership of Archie Norman, who later became a front bench Conservative MP. He was chairman of the company during the period 1996–99. ASDA, which then owned 229 stores, was purchased by Wal-Mart of the United States, on July 26, 1999. Following the takeover by Wal-Mart, several "Asda–Wal*Mart Supercentres" have been opened, creating some of the largest hypermarkets in the United Kingdom. The first of these stores opened at Patchway, near Bristol, in August 2000. At first, it was criticised for its scale and condemned as an eye-sore, but the format has now become extremely popular. In November 2004 a refurbishment of the hypermarket was completed, addressing some of the complaints.
In 2005, amid reported concerns within Wal-Mart about a slight slippage in market share, partially due to a resurgent Sainsbury's, ASDA's chief executive, Tony de Nunzio, was replaced by Andy Bond. In October 2004 ASDA launched a new format called 'Asda Living'. This is the company's first 'general merchandise' store, containing all its non-food ranges including clothing, home electronics, toys, homewares, health and beauty products. The first store with this format opened in Walsall, West Midlands, and at the time of writing has been followed by five further stores in Cortonwood (Barnsley), Altrincham, Byker (Newcastle-upon-Tyne), Thurrock, Essex and Glasgow. Tesco is also trialling a similar format, "Homeplus", in Denton, Greater Manchester. Asda has also opened a number of stores containing its George range only in several city centres. In March 2006, ASDA launched a new format called ASDA Essentials in a former Co-op store in Northampton. With a primary focus on own-brand products on a much smaller floorplate than ASDA's mainstream stores, the Essentials will only stock branded products that are perceived to be at the "core" of a family's weekly shop. This is seen as ASDA's response to the increasing strength of Tesco and Sainsbury in the convenience store sector. If the trial is a success, it will be rolled out nationally. ASDA is known for two famous marketing campaigns. In the "ASDA price" campaign, customers tap their trouser pockets, producing a 'chinking' sound as the coins that Asda's low prices have supposedly left in their pockets knock together. In the late 1980s prior to the introduction of the tap pocket campaign advertising for ASDA had featured the Fairground Attraction song Perfect. In 2004, Sharon Osbourne was selected to be part of a new marketing campaign by ASDA; her last advert was aired in August 2005. In the smiley face "rollback" campaign also used in Wal-Mart advertisements, a CGI smiley face bounces from price tag to price tag, knocking them down as customers watch. The focus of these campaigns is to portray ASDA as the most affordable supermarket in the country, a claim that is challenged by competitors, especially Tesco. Currently in ASDA advertising is a theme featuring singing children and the previous tap of the trouser pocket advertising seems to have been phased out. This has included an advert during the 2006 FIFA World Cup featuring the Newcastle United and England footballer Michael Owen in an advert with the children singing Vindaloo. ASDA has been winner of the Grocer Magazine "Lowest Price Supermarket" Award for the past 9 years.
Welcome to The ASDA Story. The story begins with the great entrepreneurial vision and drive of the founding fathers who pioneered the concept of one-stop shopping in the UK. Throughout four decades of growth, turbulence, change and resurgence it has been our thousands of colleagues, of the past and present, who have continued to produce the unique ‘ASDAness’ and of whom we are so justifiably proud. We thank them all! So please read on and enjoy The ASDA Story. 1920 to 1960 - In the Beginning The first ‘Act’ of The ASDA Story was set in the old Queen's Theatre in Castleford, West Yorkshire in the early 1960s. However, its roots can be traced back to the 1920s with two branches. The Asquith family (W.R. Asquith) had an original family business, a butcher's shop in Knottingley, West Yorkshire. The business was eventually expanded to seven butchery shops. The two sons of W.R. Asquith, Peter and Fred were actively involved in the family business and were later to become co-founders of ASDA. At the same time, during the 1920s, a group of enterprising West Riding dairy farmers joined forces, under the banner of Hindell’s Dairy Farmers Ltd. These included the Stockdale family (A. Stockdale), and a subsidiary company, Craven Dairies Ltd, was formed. Through a process of acquisition and diversification, a new public company was formed in 1949 – Associated Dairies & Farm Stores Ltd. with Arthur Stockdale as Managing Director. During the 1950s and early 1960s Associated Dairies expanded the number of pork butchery shops (under the Farm Stores fascia) and also created the fascia Craven Dairies for its cake shops and cafés. The son of Arthur Stockdale, Noel, (later to become Sir Noel Stockdale) met and struck up an immediate rapport with the Asquith brothers and so became the other co-founder of the future ASDA. ("None of this would have happened without Noel", Peter would say later.) 1960s - The Reign of Queen’s Supermarkets Peter Asquith, a butcher, and his brother Fred, a teacher, (“In our family the bright ones became teachers and the rest were butchers.” said Peter, the butcher) had already started and sold a store in Pontefract (1958), when in 1963 they converted an ex-cinema (which had originally been a theatre called The Queen's) in Castleford, West Yorkshire, to a self-service supermarket. This was quickly followed by a second (an ex-indoor market) supermarket at Edlington, near Doncaster. Both these stores traded under the fascia of Queens. The Asquiths discovered the attraction of discounting to customers almost by accident. Crosse & Blackwell were offering a 6d (2.5p) postal order for every soup label returned. Their buyer, Jack Hewitt (later to become Managing Director of ASDA), spotted an opportunity and ordered 1,000 cans of soup. They then spent the next few days cutting off 24,000 labels for redemption and offering the cans of soup at a reduced price! The concept of food discounting and offering customers value for money had arrived! By 1965 Peter was building the first new supermarket from scratch, at South Elmsall (near Pontefract), on the site of the old Palace Cinema, adjacent to a large municipal car park. It was around this time that Peter Asquith was looking for a company to take over his in-store butchery operation and he made contact with Associated Dairies. Discussions followed between Peter Asquith and Noel Stockdale and a new company was formed. ASquith + DAiries = the birth of ASDA Within a month, a fourth store opened at Wakefield (Southgate). Peter also had the great foresight to link growing car ownership with food shopping and to seek sites which had the benefit of adjacent municipal car parks. By March 1966 a fifth store was opened at Whitkirk (Leeds) on the site of an old cattle market. The first move outside the Yorkshire heartland happened in September 1966 in the centre of Billingham (Teesside). ASDA was clearly on the march. 1970s - Pioneering One-Stop Shopping The revamped large G.E.M. stores were later to be seen as landmark events in the development of UK retailing. To expand this new trading format, petrol filling stations were added. Once again, it was Peter Asquith who pioneered this. From as long ago as 1959, when he had his first supermarkets in Pontefract, he bought the site of an old malt kiln and obtained planning permission to turn it into a petrol filling station. Peter wanted to discount petrol prices but at that time none of the major oil companies would support this new idea, so he did a deal with a little known Russian oil company called NAFTA! And so, in 1967 ASDA/Queen's opened its ninth store with a petrol filling station, at Halifax. By 1970 ASDA had over 30 stores, with eight of them over 50,000 sq.ft., and was poised to expand beyond its northern heartland, in the south. Also, at this stage – despite the great entrepreneurial flair of its founders - ASDA now needed more experienced, professional management to take it to the next phase of its growth. Southern Expansion Peter Firmston-Williams was appointed M.D. of ASDA in 1971, having been M.D. of Key Markets, and presided over ASDA’s expansion into the south with new stores at Newport (Wales) in 1973, Plymouth in 1976 and Gosport in 1977. This era culminated with H.M. the Queen opening the Shopping Centre at South Woodham Ferrers in 1978. Diversification and Slow-Down By the time Peter Firmston-Williams left the business in 1981, ASDA had 80 stores totalling three million sq.ft. of selling space. However, the expansion in the south east was expensive and growth was slowing down. 1970s & 1980s During this period, Associated Dairies had embarked upon a programme of diversification: • Allied Carpets The business was selling everything from baked beans… to motor cars when John Fletcher was appointed M.D. in 1981, having come from Jimmy Gulliver's Oriel Foods. Also, at this time, the UK economy was slowing down and unemployment was rising. Fletcher's strategy to improve profitability was to increase margins of branded foods (rather than to develop own labels). Whilst there was short term improvement, this led to a loss of price competitiveness and a steady decline in customer numbers, as ASDA strayed away from its founding principles and its core business. John Fletcher subsequently left ASDA in 1984 to be replaced by John Hardman, who had previously held the post of finance director. In 1986, the year of his retirement, Noel Stockdale received a knighthood in recognition of his business achievements. Under Sir Noel's leadership, Associated Dairies attained a top 30 listing in the FT-SE 100. Upon his retirement, Sir Noel handed over the reigns to David Dunne, who was appointed non exec chairman, with John Hardman continuing as M.D. A Turbulent Period of Mixed Fortunes The 1980s started well for ASDA with the opening of the 100th store at Charlton, London – 20 years since the first store opened at Castleford. John Hardman embarked upon a three-prong strategy to arrest the decline of ASDA’s performance: • Fitch & Co were commissioned to develop a new-look ASDA store (1984) 1980s - The M.F.I. Merger M.F.I. (Mullard Furniture Industries) and ASDA formed a merger in May 1985, which was at the time seen as an opportunity to slow the expensive expansion in the south over the previous five years. It was proclaimed as a “£2 billion marriage, as a launch pad for major expansion”. However, in the years that followed, it proved to have been a drain on management resources, producing little return. M.F.I. was subsequently sold in 1987 through a management buy-out for £500m. It was during this period that ASDA moved away from almost total supplier direct deliveries into stores. Work commenced in 1987 on building seven brand new distribution centres, strategically located throughout the UK at Falkirk, Wakefield, Wigan, Bristol, Dartford and two at Lutterworth, all of which became fully operational in 1989. In 1988 ASDA moved its headquarters from its existing building (an old converted mill in Morley) with a collection of seven other sites around the Leeds area, to a new 21,000 sq.ft. state-of-the-art office complex at a cost of £15m, which was opened by Margaret Thatcher. A major success of this period was the foundation of the George Davis partnership and the introduction of George clothing into 65 stores in February 1989. This was to prove to be one of the major contributing factors to ASDA’s future resurgence - though few would have imagined that one day “George” would become the largest volume clothing brand in the UK! Despite some of these high points, the storm clouds were gathering. 1990s - Off the Rails The push south continued and in 1987/8 eight new stores were opened at Ipswich, Brighton, Bedminster, Slough and the flagship Watford store, which was another landmark in UK retailing - 64,000 square feet and the longest checkout bank - 45 in total. However, costs were rising and the ASDA offer, which had been so successful in its northern heartland, was struggling to attract and keep the more affluent customers in the south east. To combat declining profits, gross margins were driven upwards through higher prices, resulting in fewer customers. More importantly, ASDA was slowly discarding the basic brand values of the company as embodied in its original “value for money” proposition to customers. ASDA was starting on what would later be referred to as “a doom loop” scenario. Despite the foreboding signs, the ASDA board made a successful bid for 61 Gateway stores in April 1989 for £750m - a sum which many city analysts considered far too high. This acquisition increased the number of ASDA stores to 192. The increased borrowing needed to finance the Gateway acquisition coincided with dramatically higher interest rates, resulting in a crippling debt burden of £1 billion. To cap it all, ASDA experienced severe problems with the management and supply to stores of fresh foods through the new national centralised distribution centres, thus costing £16 million on the bottom line. Early in 1991 there was a real danger that ASDA would default on some of its debt covenants. There followed a number of profit warnings and a shareholder revolt. The top team paid the price; John Hardman resigned along with Graham Stow. Sir Godfrey Messervy was appointed as interim chairman until Patrick Gillam was appointed chairman in September 1991. The stage was now set for the Archie Norman phenomenon! 1990s - The Norman Conquest The new dawn for ASDA began in December 1991 with the arrival of its new C.E.O., Archie Norman, a 37 year old Cambridge and Harvard graduate, who had already had successful careers with both Kingfisher (as group finance director) and McKinsey (where he was a partner). At this time Archie was the youngest C.E.O. of a FT-SE 100 company - although some city analysts questioned his wisdom in taking on what was seen as a “basket case” company! Taking over the reins of a company which had totally lost its direction, had been strangled by a £1 billion debt burden and whose share price was as low as 27p, required bold action and clarity of strategic direction. Archie declared his starting point as Day Zero and began his Herculean task by rebuilding his senior team. Thus entered the other key player in ASDA’s recovery - Allan Leighton, the 39 year old former “veteran” of Mars, latterly as sales director of Pedigree Foods. The credit for reversing ASDA’s fortunes is primarily due to the immense and complementary talents of Archie and Allan, who were joined by two other members of the top team; Phil Cox (Finance Director) and the sole survivor of the Hardman board, Tony Campbell (Trading Director).
From Doom Loop to Virtuous Circle The steps in achieving financial stability were the introduction of a company-wide pay freeze and a shareholder emergency rights issue which raised £350 million. Following a rigorous analysis, a new strategy was developed and implemented: The ASDA Way of Working (A.W.W.) The previous culture at ASDA had been a Q1 style of management (i.e. “tell and do”) with hierarchical structures and too many layers. A.W.W. provided a framework for a new organisational structure - it made the stores the heroes and promoted colleague involvement. A mission statement was developed along with six fundamental values and from this point onwards everyone working in the business would be referred to as “colleagues”. Renewal The word “renewal” entered the ASDA vocabulary, to mean: • To physically renew the fabric of a store building Value Stores and Dales New, experimental formats were trialled with limited range options and unique pricing structures which were intended to take on the new continental discounters. These and other initiatives helped to turn the tide and at the end of the first year the £1 billion debt mountain had shrunk to £76 million and sales volumes were up 27%. ASDA had rediscovered its core values and customers were returning to find a revitalised ASDA - the return of “ASDA Price - Pocket the Difference”. ASDA had returned to its roots! In 1995 recovery had been achieved and the next phase “BREAKOUT” was launched. Archie and Allan not only saved ASDA from disaster, but transformed it into a major force in UK retailing. Archie subsequently left ASDA to pursue a career in politics, and in 1997 he was elected Conservative MP for Tunbridge Wells. Summer 1999 While most retail commentators were trying to digest the consequences of a proposed £18bn merger between ASDA and Kingfisher, that market move proved to be no more than a smokescreen hiding the real action! Days before the Kingfisher deal was due to be approved by shareholders, Wal-Mart made a £6.7bn offer that ASDA simply couldn't refuse and the superstore that had stolen many of Wal-Mart's ideas as part of its own recovery finally came home to Bentonville and became part of the world's biggest and best retailer. 2000 Onwards The pace ever since has been relentless.
The Future The journey of change never ends. The ASDA/Wal*Mart story continues.
End? This is not the end of the ASDA Story - the pace of change continues and the future offers both challenges and opportunities for ASDA…
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• Flowers for all occasions and hand tied, wrapped and gift boxed in style
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