The store, in Sutton, Surrey, is large at 47,500 sq ft but located in a town centre site. It opened on November 17 and benefits from volumes of shoppers through its location in a relatively densely populated outer London area.
Despite the population density in the area, the competition is remarkably weak. Just to the south of the town centre is a big Safeway while Iceland and Marks and Spencer each have a store in the town centre.
The Asda store is an old Tesco that has been considerably expanded. Both Tesco and Sainsbury have settled on edge-of-town sites.
Not surprisingly, given the proximity and relative brand strengths of the two fascias, it is Safeway who is likely to suffer most at the hands of the new Asda.
Safeway is likely to witness a net impact on its two surrounding stores of almost £600,000 per week.
Tesco, with three stores ringing the town, will suffer the next greatest impact, with sales predicted to decline by £447,000 a week.
Sainbury has four stores surrounding Sutton but all of them are some distance away so the combined impact of £180,000 will be fairly lightly spread across these stores.
Asda will be cannibalising slightly from its stores at Croydon and Burgh Heath, but can still expect a considerable net gain from the store provided it did a reasonable deal on the site.
All this stacks up to a 39% market share of the catchment for Asda, as revealed by the piechart below.
Tesco shares 21% of the catchment, just ahead of Sainsbury’s 16% local market share. Safeway slips back to fourth place, serving just 13% of the area - a catchment it used to dominate.
The one thing that does not entirely stack up in favour of Asda is the local demographic make up. If the demographics were right as well, this store could really fly.
The Sutton catchment is largely made up of the middle England demographic represented by the secure families ACORN profile.
All of the big three supermarkets serve this group equally well. But the large numbers of educated urbanites and post industrial families that live in the catchment are not reflected in Tesco, Sainsbury or Asda’s profile, although Sainsbury performs moderately well in the former.
In fact, Sainsbury’s profile has the best fit to the catchment of any of the major chains.
Overall the fit between the demographic profile of Asda and the catchment is just below that of Tesco and Waitrose.
Sadly for Safeway, this is still someway better than the fit it achieves.