// Issa brothers looking to cut grocery floor space in Asda stores by about a quarter
// This would make way for nail and beauty bars, takeaways and cafes
// The brothers are already trying to add Caffè Nero to the Asda estate
The new owners of Asda are reportedly mulling plans to cut grocery floor space in stores to make way for cafes, takeaways, nail salons and beauty bars.
According to The Sunday Times, the billionaire Issa brothers are looking to shrink grocery floor space in Asda stores by about a quarter in a bid to create new customer experience incentives.
The brothers also reportedly have plans to make Asda’s supermarkets become distribution centres for its online arm.
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It comes after reports last month indicated they were considering spinning off the grocer’s own-brand fashion label George under licence to help reduce debt.
The Issa brothers are already trying to add Caffè Nero to their estate by buying part of its £350 million debt pile.
Mohsin and Zuber Issa have started approaching lenders to the coffee chain seeking to build a position that would allow them to bid for control in a debt-for-equity swap if Caffè Nero was forced to restructure its borrowings.
The brothers, who are co-chief executives of global convenience and forecourts retailer EG Group, acquired a majority ownership stake in Asda late last year.
In February, the Issa brothers and their private equity partners TDR Capital confirmed that their £6.8 billion acquisition of Asda was complete.
However, any plans by the Issa brothers cannot yet be implemented as their takeover deal still needs a final clearance from the CMA.
Asda’s former owner Walmart is retaining a stake in the grocer and is reportedly going ahead with a partnership strategy that could see it introduce Accessorize, Claire’s Accessories and MusicMagpie to its larger stores.
The Issa brothers also plan to replace most third-party convenience stores in EG’s 397 UK forecourts with an Asda convenience store.
They have promised to invest £1 billion in Asda over the next three years.
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This is a bad idea. Stores will become tacky, and will further erode our high streets.
The high st will be replaced with an all under one roof market place
So buy a business wort Billions and then completely ruin it buy adding something that customers don’t go in for, grocery is key for Asda, not nail bars, every high street has multiple nail bars already. These two are going to ruin Asda completely, I did read they were looking to license out the alcohol section, basically grant another company a contract to run a section for an eye watering amount.
This is a very bad idea….people don’t want to be hanging around supermarkets; they want to get their shopping and get away fast….the Issa brothers (or their advisors) are completely out of touch. I buy non-food items in stores like ASDA as a last resort and you can be sure that when lockdown ends I’ll be heading back to the High Street for my non-food purchases….
RETAIL GAZETTE :- ASDA new owners to continue ASDA policy since the 1980’s of having concessions and franchises in it’s store’s and continuing to flex the back of store space to support the demands on stores, either through it’s online or individual stores trading needs.
Why don’t you follow up this headline; ASDA to close one of it’s largest city centre stores. .
What else can the partnership strategy do for ASDA?
DisASDA looming…
Is this really because the stores, mainly the supercentres, are now too big and its about finding alternative use for that space though? Underused space being rented out to help keep grocery prices low? Waitrose is putting John Lewis concessions in stores, Sainsbury’s are putting Argos branches in store – is it that different? Selling the alcohol distribution arm off isn’t a surprise, but selling George clothing would be a bad idea.
With them hoping that customers spend more time will they look to address their time limited car parking in some stores. Twice i’ve had to fight them after getting a fixed penalty notice from their 3rd party parking partners whilst using their cafe -waiting a long time for food- and also using their instore opticians waiting way beyond my appointment time. Stand alone George clothing will be no competition to Primark.
The concession business model worked really well for Debenhams.
Asda may go the same way as other retailers loaded with debt by venture capitalists who take exaggerate fees then a small drop in sales will see then taking dramatic action.
Probably not as bad as everyone seems to think and Asda itself already has a hefty debt pile which needs to be resolved as they have been slowly creeping deeper in debt over the years and the Issa brothers have already made millions having one building and renting spaces to third party companies. It’s mostly likely the Asda cafe spaces will be rented to one of the following companies Starbucks/ Costa/ Cafe Nero/ Subway unless they get their hands on the Cafe Nero debt then it’s most likely will be Cafe Nero and you will probably find a Greggs next to the bakery and they will probably allow third party designer clothing companies sell within their George department area just like Debenhams did and Next currently do and rent out the Asda optician and Asda pharmacy out to third party companies and as a last resort rent the liquor space to someone like bargain booze all under one roof, then I believe when their spar felicities contracts run out within Euro Garages they will not renew them and rebrand them as ASDA Groceries and Asda will supply them so instead of going to Tesco/Morrison’s/Sainsbury’s/ Waitrose or a retail park outlet you will go to Asda which will have everything under one roof