Asda - History

History

Asda Stores Limited was founded as Associated Dairies & Farm Stores Limited in 1949 in Leeds. The adoption of the Asda name occurred in 1965 with the merger of the Asquith chain of three supermarkets and Associated Dairies; Asda is an abbreviation of Asquith and Dairies, often capitalised. For a short time in the 1980s Asda Stores Ltd was a subsidiary of Asda-MFI plc following a merger between the two companies. Other companies in the group were Associated Dairies Limited, the furniture retailer MFI and Allied Carpets. After the sale of MFI and Allied Carpets the company name changed to Asda Group plc. The dairy division was sold in a management buyout and renamed Associated Fresh Foods, meaning that Asda has since had no connection with any of the firms from which its name was derived.

With stores mainly based in the North of England, the newly focused food retail group expanded further south in 1989 by buying the large format stores of rival Gateway Superstores for £705 million. This move overstretched the company and it found itself in trouble trying to sell too many different products. As a result it was forced to raise money from shareholders in both 1991 and 1993. It revived under the leadership of Archie Norman, who later became a front bench Conservative MP. CEO from 1991, Norman was chairman of the company during the period 1996–99, and replicated the store on the basis of United States retail giant Wal-Mart, even sending protégé Allan Leighton to Bentonville, Arkansas to assess and photograph the systems and marketing which Wal-Mart had deployed.

In 1997, the Spice Girls licensed their name and image to Asda in which they created over 40 different Spice Items for Christmas 1997 developing goods such as party supplies, official merchandise, and even Spice Girl branded kids meals in the stores' restaurants. The Spice Girls earned £1 million for this sponsorship deal.

When Norman left the company to pursue his political career, he was replaced by Leighton. Wal-Mart wanted to enter the UK market so CEO Bob Martin lobbied British Prime Minister Tony Blair on planning issues. Asda, which at the time owned 230 stores and had planned to merge with Kingfisher plc, was purchased by Wal-Mart on 26 July 1999 for £6.7 billion.

After the takeover Asda continued to maintain its headquarters at the then newly opened "Asda House". This building was one of the first of the new large office blocks to open as part of the redevelopment of the huge area south of the River Aire in Leeds city centre, in the Holbeck district, West Yorkshire.

In 2005, amid reported concerns within Wal-Mart about a slippage in market share, partially due to a resurgent Sainsbury's, Asda's chief executive, Tony De Nunzio left, and was replaced by Andy Bond. In 2005, Asda expanded into Northern Ireland by purchasing 12 Safeway stores from Morrisons.

In November 2008 there were reports that Asda was to buy Irish retailer Dunnes.

In 2009 Wal-Mart 'sold' Asda for £6.9 billion to their Leeds-based investment subsidiary Corinth Services Limited. The deal, which took place in August, was described as part of a “group restructuring” and means Asda remains under the control of the Wal-Mart, since Corinth are themselves a subsidiary of Wal-Mart.

On 11 May 2010 Andy Clarke, a former manager of an Asda store, who was also the Chief Operating Officer, was appointed as Chief Executive Officer.

In May 2010, it was announced that Asda would buy all of Netto's UK Operations in a £778 million deal. The deal will see Asda move into the smaller, more localised store market with most Netto stores being only one fifth the size of the average Asda supermarket. In September 2010 it was announced that Asda will be forced to sell 47 of the existing 194 Netto stores due to a ruling by the Office of Fair Trading. The rebranding of Netto stores to Asda began in early 2011.

In February 2011, Asda announced the purchase of 6 stores from Focus DIY, which will be converted into supermarkets subject to approvals and local planning consents.