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Issa Brothers Planning To Open Hundreds of Asda Forecourt Convenience Stores

The Issa brothers are reportedly planning to roll out Asda convenience stores across their EG Group forecourts estate.

According to The Sunday Times, Mohsin and Zuber Issa want to introduce ‘Asda On the Move’ stores to around 300 of their 400 EG forecourts in the UK following the success of trials at five sites that began last October.

The new Asda format marked the group’s first concerted push into the convenience channel. The trial sites offer a comprehensive range of 2,500 products drawn from all key categories including bakery, fresh, chilled and ambient.

Asda_On_The_Move

By combining food retail and petrol, the new owners of Asda hope to boost overall grocery sales and generate savings on fuel purchases and costs. EG already operates more than 700 food outlets in the UK and Ireland, including branches and drive-thrus for KFC, Starbucks, Subway, and Greggs. The Issas also recently bought fast-food chain Leon for £100m.

The Sunday Times report suggested that Asda’s new owners are also weighing up plans to open supermarkets of between 30,000 and 40,000 sq. ft. in locations including high streets and out-of-town retail parks.

An industry source is quoted as saying: “The fact Asda has not had a convenience retail offer, when convenience and discount retail are the only two growing categories … that kind of tells you how asleep at the switch [Asda’s previous owner] Walmart was.”

The Issas are currently hunting for a new Chief Executive for Asda after the departure of Roger Burnley earlier this month.

NAM Implications:
  • Asda beginning to flex its EG muscles.
  • Bringing disruption to convenience and discounter channels…
  • …apart from economies of scale via synergies with their forecourt estate.
  • Meanwhile, all mults on private equity assessment…
  • Time for suppliers to fundamentally reassess their entire mults and discounter trade strategies?