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09/26/2001

Wal-Mart Plans Price War At U.S.-style Asdas

Financial Times - Wal-Mart plans to launch an American-style price war in the UK, the boss of its British arm said on Wednesday. The world's biggest retailer is prepared to use its financial muscle to slash prices on 5,000 lines of household goods.

Wal-Mart, which bought Asda two years ago, says it will make the British supermarkets more like those in the United States, which sell a far wider range than just groceries. The move represents a shift in tactics by Wal-Mart, which has previously been keen to maintain Asda's British identity.

The company claims it will bring a revolution in retailing, which will spread to affect high-street stores. The move could even mean a name change to Wal-Mart for the 247 Asda stores.

The price cuts announced on Wednesday were on a wide range of goods from televisions to bicycles, toys, duvets and car accessories.

Tony DeNunzio, Asda's chief operating officer, said, "General merchandise is at the heart of Wal-Mart's success and today that heart has started to beat in Asda." He added that Wal-Mart has already opened three supercenters across the country, under the name Wal-Mart-Asda, offering discounted prices on general goods. "Our supercenters proved that, with the help of Wal-Mart's expertise, we can deliver the best non-food range at the best possible prices," DeNunzio said.

"Today we start rolling that concept out of the supercenters and into every one of our stores - this is just the beginning." DeNunzio claimed that prices on the 5,000 lines would be between 10 and 50 percent cheaper than the high street average.

He said Asda buyers had traveled widely abroad to seek out the cheapest suppliers and had forged links with 52 new firms via Wal-Mart's general merchandise supplier PREL.

Both Tesco and Sainsbury's have announced price cuts of Pounds 100 million in the last two weeks in anticipation of the Asda announcement, and further cuts look increasingly likely