Asda, Tesco Tweak Non-Food Development Strategies

UK retailers have had a bit of a rough time lately so the latest news will come as no surprise. The two biggest retailers, Asda and Tesco, have changed their strategies on the development of non-food stores.

Both supermarket chains have ventured into standalone non-food formats, both with dubious success. Asda has decided that just one new Asda Living non-food store will be opened in 2012, in Gateshead, which is a significant slowdown of its initial plans to have 150 operating by the first half of 2015. Meanwhile Tesco has been carefully examining the performance of its 13 Home Plus general stores which sell furniture and homeware.

So far, 27 Living non-food stores have been set up and it is thought that some of them are currently being reviewed by Asda. However, the company still has plans to create 5,000 jobs this year as part of its development strategy, including the opening of 25 stores and three depots in 2012 at an estimated cost of £500m.

Asda’s main rival Tesco is said to be reconsidering its standalone furnishing stores due to lack of interest from consumers. Officially, two of its 13 stores, in Telford, Shropshire and in Staines, Surrey, are up for sale. The retail giant did not comment but sources close to Tesco said that changing priorities from one store to another is a regular practice for the retailer.