Asda is to begin wholesaling to independent retailers that adopt its new ‘Asda Convenience’ store format.
Records uncovered by our sister website Better Retailing reveal the supermarket is already trialling the brand and partnership with One O One, a chain of around 50 convenience stores in the Glasgow area.
One O One opened three Asda Convenience stores between four and six weeks ago, each stocking extensive grocery ranges powered by Asda own-label products. A rollout to more One O One stores is also being considered.
In an exclusive interview with Better Retailing, Joseph Sutton, Asda’s Express, fuel & wholesale director, said: “It’s a massive opportunity for Asda to combine features like great own label, extensive fresh access, a broad range overall and really good pricing with a selection of independent retailers who run great shops.”
The early results from the model, which aims to attract “small-supermarket missions”, are promising. Asda told Better Retailing the pilot stores are up 20% like for like, driven by increases of more than 100% in food to go and chilled grocery. Meanwhile, tobacco and alcohol sales are “broadly flat”. The early signs are exactly what we wanted,” Sutton said.
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Paul Stirling, group retail director at One O One, said the partnership combines the convenience chain’s local trust and knowledge with Asda’s “exceptional value, market-leading own-brand range and strong customer proposition”.
Sutton revealed Asda will have invested “over £2m” in the project by the end of the year. It is drawing on the experience and operational strength it has built supplying nearly 600 Asda Express stores.
The project is also being supported by a new team including Asda head of wholesale Martin Hill, who has experience building franchise estates at both One Stop and Morrisons.
Asked about Asda’s ambitions, Sutton responded: “In the next 18 months, our ambition is to be partnered with at least three groups that are comparable to One O One. The overarching goal is to bring the Asda brand to hundreds of independent shops.”
Asda’s new “wholesale supply model” sits somewhere between a franchise and symbol agreement. Like a franchise, there will be audits, maximum prices on Asda own-label products, Asda-branded collateral and close collaboration with the supermarket. But, like a symbol agreement, retailers will be able to set their own prices and ranges and work with complementary external suppliers.
