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Asda buys into Northern Ireland

07-Jun-2005

Asda, the UK subsidiary of Wal-Mart, said yesterday it will buy 12 Safeway stores in Northern Ireland from Wm Morrison for £73.6m (€109m), giving it a foothold on the island.

Asda is the UK's second-largest supermarket group. The chain said it will spend a further £30m redeveloping the stores, which will trade under the Asda name byNovember once the deal is cleared by the Office of Fair Trading. The chain has also made a commitment that its prices in Northern Ireland will be no higher than those found in its 279 stores in England, Scotland and Wales.

Asda said it already works with a number of key suppliers in Northern Ireland, including cattle suppliers ABP and Linden Foods. The two suppliers account for about 40 per cent of the total output of the local beef industry.All of Asda's half fat cheese is supplied by Fayrefield in Belfast. Asda said it would meet with representatives of the local agriculture sector to form ties with primary producers.

 

A survey report by research group TNS found that Asda had lost a share of the UK grocery market during April. The chain's share of the marketfell to 16.5 per cent for the four weeks to 24 April , compared to 16.7 per cent during the same period in last year. The chain's chief executive, Tony De Nunzio, quit as its chief executive to join VendexxKBB in Holland. He was replaced by Andy Bond, the company's chief operating officer.

 

Meanwhile Tescos' market share jumped to 29.8 per cent from 27.6 per cent a year ago. Sainsbury's market share rose to 15.8 per cent compared to 15.4 per cent a year ago. Morrisons, which boughtthe Safeway chain last year, had its market share fall to 11.8 per cent from 14.2 per cent.

 

Supermarket Clone Towns

 

Tesco, the largest supermarket chain in the UK, should be broken up and its competitors should be banned from any merger activity says the New Economics Foundation (NEF), a community advocacyresearch group.

 

Tesco's domination of the market and key towns is damaging communities and local enterprise the NEF states in a report on the state of UK towns. Tesco holds a 30 per cent share ofthe UK grocery market, according to figures from TNS.

 

The NEF report also calls on government and local authorities to:

 

  • Use planning law to protect locally owned stores;

  • Introduce a moratorium on retail takeovers by existing chains;

  • Apply a limit of eight per cent market share for any of the four leading supermarkets and requiring them to divest interests above the limit;

  • Restrict supermarkets floor space through better controls;

  • Make complaints to the Office of Fair Trading (OFT) confidential or establish an independent and confidential watchdog;

  • Introduce local competition policy to guarantee market access to small, local and independent retailers;

  • Implement Irish-style retail planning guidelines to control and cap the size of supermarkets, to make sure that town centres are the primary focus for development and to require local authorities to develop retail plans for their area;

 

The report, Clone Town Britain, ranks 103 towns and cities and 27 London neighbourhoods according to the prevalence of independent retailers.