Asda trials new collaborations with B&Q and EG Group

Nick Gladding
Senior Retail Analyst
@RetailAnalysis

Date : 18 September 2020

Asda has unveiled two new trial partnerships with leading brands, as it follows through on its 'test and learn' strategy to make stores more engaging to shoppers.

B&Q in-store shops

A collaboration with the UK's leading home improvement retailer will see compact B&Q stores installed in four Asda superstores. The first two stores, which will open in Dagenham and Sheffield later this year, will be operated by B&Q and provide customers with access to a large number of products, as well as easy online access to B&Q’s full range for home delivery or click & collect.

'Asda On the Move'

Asda is also joining forces with forecourt operator EG Group to trial a new convenience proposition. 'Asda on the Move' will be launched at three forecourts in the Midlands - Ashby, Leamore and Primley.

Further partnerships developed

Asda is also piloting a trial with online retailer musicMagpie in five stores in the north of  England. The trial will see a range of used DVDs available to purchase alongside Asda’s current entertainment offer, bringing online retail into physical stores. Additionally, Asda’s partnership with Claire’s, launched last year, will be extended to a further 15 stores from September onwards. 

Making customers' lives easier

Preyash Thakrar, Asda’s Chief Strategy Officer, said: “Our partnerships strategy is focussed on making our busy customer’s lives easier. That means offering convenience when they visit our stores by bringing in complimentary brands to help them complete more shopping missions in one location, and convenience that makes our great value products more accessible in local communities. We anticipate working with more businesses who share our passion for delivering value for customers in the coming months.”

Analysis

These trials demonstrate imaginative responses to the challenges Asda faces. A tie-up with B&Q could be very positive for Asda; no other Big Four retailer has a tie-up with a DIY specialist and grocers' own DIY ranges even in the largest stores are typically very limited. The announcement comes on the day the ONS reports that home improvement retail sales have grown strongly in August as shoppers have used the summer to catch up on home maintenance tasks and to make their homes easier to work in. B&Q has for several years been experimenting with smaller format stores as like Asda, it has faced a growing challenge from declining footfall to its large out-of-town stores so will be keen for the trial to succeed. Both retailers also share a similar demographic of young family shoppers.

A partnership with EG Group also makes a lot of sense. Asda is one of the UK's largest fuel retailers but has not used its retail expertise to build up a network of standalone forecourt convenience stores. It operates currently operates just 18 standalone sites, a total that has fallen over the last year, at a time when rival Morrisons has built up its reach by partnering with several forecourt operators.

EG Group has grown rapidly to become one of the largest forecourt groups in the world with around 5,000 sites across three continents, including many SPAR forecourts in the UK. It has also previously had a tie up with Sainsbury's. The group was also reported earlier this year to be part of one of three consortia bidding to buy Asda from Walmart.

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