Asda could be about to accelerate its push into the convenience channel by buying the Co-op’s 130-strong petrol forecourt chain.
At the end of last week, it was reported that the Co-op was working with bankers to explore a sale of the forecourt sites, which could raise around £450m. The proceeds from the sale would be used to reduce the society’s debt pile and fund investment in its digital capabilities.
According to Sky News, Asda is the leading contender to buy the business, which includes a sizeable convenience operation.
The report quotes sources that said a deal could be agreed upon as early this week, although they cautioned that the supermarket faced competition from other parties interested in the Co-op assets.
Asda moved into convenience retailing 18 months ago with the launch of its ‘Asda On the Move’ format on petrol station forecourts operated by the EG Group. There are now around 40 sites, with Asda announcing towards the end of last year that it planned to open over 200 convenience stores on the forecourts operated by its new owners, the Issa brothers and TDR Capital.
People close to the Co-op sale process confirmed that it was Asda, and not EG Group, that was in talks to buy the assets.
Recent reports have also suggested that Asda is preparing to launch a standalone convenience format to challenge the likes of Tesco and Sainsbury’s.
Last month, it was revealed that Co-op was axing around 400 jobs at its head office in Manchester as part of a restructuring and cost-cutting drive to adapt the business to the tough trading environment.
NAM Implications:
- A natural fit for Asda.
- (Hopefully, the government will agree…)
- Meanwhile, a ‘what if’ to explore the implications of a go-head in Asda’s favour…
- …could help suppliers to prepare now.
