Wal-Mart’s 258-store Asda Group in the UK will announce today that it plans to spend the equivalent of $560 million (US) to expand its operations there, opening 10 new stores as well as expanding and adding mezzanines to others. The expansion will result in the creation of about 3,900 jobs, according to the company.
The announcement comes just weeks after Wal-Mart said that it would bid on Safeway Plc, believing that it might be able to land at least part of that now-available chain.
Asda is the third-largest food retailer in the UK, with Safeway in the fourth position. Tesco is number one, followed by J. Sainsbury…though it is expected that Asda will leapfrog Sainsbury this year.
Much of the expansion is expected to be in the company’s non-foods operation.
The announcement comes just weeks after Wal-Mart said that it would bid on Safeway Plc, believing that it might be able to land at least part of that now-available chain.
Asda is the third-largest food retailer in the UK, with Safeway in the fourth position. Tesco is number one, followed by J. Sainsbury…though it is expected that Asda will leapfrog Sainsbury this year.
Much of the expansion is expected to be in the company’s non-foods operation.
- KC's View:
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Must be nice having all that money just burning a hole in Wal-Mart’s pocket…
It’s also an interesting announcement for Wal-Mart/Asda to make at a time when it is hoping the UK Office of Fair Trading (OFT) will approve its bid for Safeway. You’d think Wal-Mart would have waited until it got a sense of which way the OFT was leaning.
On the other hand, maybe Wal-Mart only bid for Safeway to raise the price for the competition. Or maybe it believes that it has enough political clout to land at least a sizeable piece of Safeway no matter what.
Or maybe there’s something else going on, some other strategic imperative that we’re not aware of.
