"we continue to see significant opportunities"
The billionaire Issa brothers are aiming to open 200 Asda petrol station stores by the end of 2022.
It is the first big move since Mohsin and Zuber Issa, and TDR Capital purchased Asda for £6.8 billion.
The company said 28 of its new ‘Asda on the Move’ stores would open in 2021.
The Issa brothers and TDR Capital also co-own EG Group.
It is buying Asda’s fuel station for £750 million. When the deal is completed later in 2021, it will give it a network of nearly 700 sites.
The ‘Asda on the Move’ stores are up to 3,000 sq ft in size and stock up to 2,500 products, including Asda’s luxury Extra Special range as well as essentials such as fresh produce, sandwiches and ready meals. There will also be Greggs and Subway counters.
In a statement, the Issa brothers said that Asda has proved “incredibly resilient in 2021” customers continued to eat more at home.
They said: “Our plans to roll out Asda On the Move will bring Asda to new customers… we continue to see significant opportunities to drive innovation across the business and we look forward to working with the Asda team to execute our growth strategy.”
After a successful five-store trial, the rollout will begin in October 2021 with openings on its forecourts in Knowsley, Crewe, Skelmersdale and Holtspur.
Asda will supply the products on a wholesale agreement to EG Group, which will own and operate each site.
Asda stated that sales at established stores fell 0.7% in the three months to June 30, 2021, as they compared with strong figures one year ago when the UK first went into lockdown.
They were up 3.1% when compared with the same period of 2019.
Asda is starting a new chapter in private equity ownership.
The Issa brothers put less than £800 million of their own money into the deal after selling assets and raising its debts to fund the majority of the purchase price.
There has also been a clearout of senior management including the recent departure of the chief executive, Roger Burnley, who is yet to be replaced.
On September 3, 2021, it was confirmed that the chief operating officer, Anthony Hemmerdinger, and the strategy officer, Preyash Thakrar, had left.
But Asda said it continued to “benefit from a strong, capable internal team, supported by the shareholder group”.
This comes as investors await the outcome of the private equity bidding war for control of rival supermarket chain Morrisons.
In August 2021, the Morrisons board agreed to a £7 billion takeover by US private equity group Clayton, Dubilier & Rice that was higher than an offer from Fortress.
Fortress has not given up on its potential acquisition and is “considering its options”.