Asda is strengthening its convenience proposition to ensure the resilience of the business, Mohsin Issa, co-owner of the supermarket group, said.
Speaking at an evidence session of the business and trade select committee of the House of Commons on Tuesday, Issa also noted that the business investing in staff pay and prices has been a reason for it being downgraded by the credit rating agencies.
“We chose to invest, which is why we were downgraded. It is not only about that but also about us not having convenience estate, which is widely documented by the rating agencies in terms of the resilience of the business—we just have big boxes. Hopefully, you will have seen us address that as part of the Co-op acquisition and the EG acquisition as well—having a convenience platform,” Issa told in reply to a question.
Asda has acquired 132 forecourts from Co-op in October last year, and completed the acquisition of the majority of EG Group’s UK & Ireland business in October this year.
It has opened a record 81 new Express stores this month as it accelerates its push into the convenience channel. The conversions of recently acquired Co-op and EG UK sites, alongside the opening of eight standalone Asda Express stores, brings the total number of sites so far to 229. A further 254 are due to be converted by the end of the first quarter next year.
Issa told MPs that the business has given two pay rises in the two years that they have had ownership, amassing to £264.8 million. They have also invested £140 million into cost-of-living pressures and into pricing.
“We did that to establish long-term credentials for us, investing in the customer and doing what is right for our customer for the long term. Obviously, we sacrificed profits at 25 per cent in order for us to look after the customer and our colleagues,” he added.
Issa also refuted the allegation by trade union GMB about the sweating of the assets and declining headcount in stores. He said the staff numbers increased from 140,000 to 151,000 since the takeover.
“Our conviction is that we are here for the long haul. We want to retain this business. It is about growth and how we grow the business. We have added convenience to it. We have increased colleague pay. We are not about sweating assets at all. Our customer experience is improving as we speak and we are absolutely focused on delivering value for our customers and ensuring it is a better shopping experience,” he said.
