The hard yards

The hard yards

Growing a supermarket empire is as much about human interaction as it is about figures, as Andrew Mernin learns from Asda's newest senior appointment.

The wars between small armies of nimbys and supermarket giants can be ugly, drawn out and dominate the pages of local newspapers for months at a time. While the opposition forces steel themselves for battle in tub-thumping town hall and council meets, the corporate enemy faces a fight which is more charm offensive than hearts and minds.

Amid soaring unemployment, the slow death of the High Street and the higher cost of living, though, one might expect things to be changing. The premium offering of mass job creation and cheaper consumer goods has surely made it easier than ever to open a supermarket? In fact not, according to one of the most senior people involved in the territorial expansion of supermarket empires.

Colin Sangster is the newly appointed head of property acquisitions for Asda in one of its most strategic growth markets, Scotland and Northern Ireland. His employer currently enjoys around 17.5% UK market share according to recent figures, second only to the all-encompassing Tesco dynasty.

“It’s difficult to say the planning process has got easier,” he says. “Job creation does carry a lot of political sway with the public but planning policy hasn’t fundamentally changed.

“Planning policy favours town centres and, while politically you may see some softening and desire to create jobs, it’s pretty much business as usual from a policy point of view.”

That is not to say, however, that selling the prospect of a new site to a local community hasn’t been made easier by the current market forces.

“Job creation does help but another big plus for us is our price position. We [believe we] are the lowest priced supermarket and we have been for 14 years. In this economic climate that’s a huge plus and something that people really want to see.”

In terms of preparing to enter a new town, Sangster describes Asda’s strategy as one of engagement. “We try to engage right from the start of the process and make sure we bring them along hand-in-hand rather than throwing in a planning application and hoping for the best,” he says.

As well as challenging local opposition to new sites, Asda also faces fierce competition from other members of the ‘big four’ when a prime location becomes attainable.

“There is a bit of competition for sites. Every site and every town is different, mainly because of existing representation of other food stores. When you go to most large towns of 10,000 plus people, very few of them don’t have a supermarket of some sort.

"So that will usually knock at least one competitor out and then the size of the town will often limit how many more could maybe come to town. Yes you certainly do get competitive situations but you also get situations where it’s one or two of us at most perhaps.”

Meanwhile, as independent retailers, pubs and leisure businesses struggle, there is an increasing number of opportunities for smaller stores.

“We’ve always been well known for opening larger stores but we’ve developed smaller store formats now that are successful and the acquisition of Netto in England has given us a real insight into how you work those small stores. We’ve now got a format that works and is profitable and that opens up other opportunities for us.”

Having been appointed into his new role last week, Sangster is now charged with heading up a period of expansion that will see 1,000 new jobs created in Scotland this year, and a further 350 in Northern Ireland with a new store opening in Portadown. He will also play a pivotal role in Asda’s hunt for at least 1.5 acre sites across Scotland and Northern Ireland for store formats ranging from 10,000 to 60,000 sq ft.