Asda is to open 200 convenience stores on petrol station forecourts by the end of next year as its new private equity owners put their stamp on the UK’s third-largest supermarket.
In the first formal update since Asda was sold to petrol station billionaires Mohsin and Zuber Issa and TDR Capital for £6.8bn, the company said 28 of its new “Asda on the Move” stores would open this year, with a target of reaching 200 by the end of 2022.
The Issa brothers and TDR Capital also co-own the petrol station operator EG Group. It is buying Asda’s fuel stations for £750m which, when the deal goes through later this year, will give it a network of nearly 700 sites.
The Asda on the Move stores are up to 3,000 sq ft (279 sq metres) in size and stock up to 2,500 products, including Asda’s luxury Extra Special range as well as essentials such as fresh produce, sandwiches and ready meals. There will also be Greggs and Subway counters.
In a statement the Issa brothers said that the Asda business has proved “incredibly resilient in 2021” as customers continued to eat more at home.
“Our plans to roll out Asda On the Move will bring Asda to new customers … we continue to see significant opportunities to drive innovation across the business and we look forward to working with the Asda team to execute our growth strategy.”
The rollout, after a successful five-store trial, begins next month with openings on its forecourts in Knowsley, Crewe, Skelmersdale and Holtspur. Asda will supply the products on a wholesale agreement to EG Group, which will own and operate each site.
Asda said sales at established stores fell 0.7% in the three months to 30 June as they compared with strong figures a year ago when the UK first went into lockdown. They were up 3.1% when compared with the same period of 2019 as more meals continue to be consumed at home.Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
Asda, which was part of US retail giant Walmart for 21 years, is starting a new chapter in private equity ownership. The Issa brothers put less than £800m of their own money into the deal after selling assets and raising its debts to fund most of the purchase price. There has also been a clearout of senior management including the recent departure of the chief executive, Roger Burnley, who is yet to be replaced.
On Friday, Asda confirmed that the chief operating officer, Anthony Hemmerdinger, and the strategy officer, Preyash Thakrar, had left. However, the company said it continued to “benefit from a strong, capable internal team, supported by the shareholder group”.
It comes as investors await the outcome of the private equity bidding war for control of rival chain Morrisons. Last month the board of Morrisons agreed a £7bn takeover by US private equity group Clayton, Dubilier & Rice that trumped an offer from rival suitor Fortress. The latter has not thrown in the towel and is “considering its options”.