The doors of the 317th Asda store opened on March 31. The number may have no significance but the store certainly does. Asda Essentials is the first of the retailer's so-called "discounter-plus" stores. At just 8,000 sq ft, the Northampton store is a totally different proposition, not just in terms of its size but also its offer, which is 95% own label. News of the culmination of Project Disco, which we revealed last December, put paid to speculation that Asda was planning a move into convenience, but prompted scepticism over such a heavy reliance on own label.
We visited the day before it opened to judge for ourselves. First impressions are that the store, which cost £85,000 to refit, bears more than passing resemblance to a hard discounter, thanks to its size and 46-space car park. Inside, there are a similar number of lines - 2,400 - and Asda has adopted some of the cheap and cheerful merchandising techniques of the discounters, with a basic decor, more facings and more stock held on shelf than in a standard Asda. Aisles seem wider than standard in the context of the smaller store. However, that is where the similarities end.
In terms of layout, Essentials is a true hybrid. The first aisle is stocked with impulse goods such as Easter eggs, crisps and soft drinks. Fresh and frozen food are situated along the back wall, partly because Asda is targeting consumers doing a weekly shop rather than convenience shoppers, and partly for ease of replenishment. There are more ambient goods but fewer fresh. Asda brand makes up the bulk of the own label offer, with 10%-15% devoted to Smartprice, roughly the same ratio as in a larger store, and 5%-10% to Extra Special. The store also stocks kids' brand Great Stuff and Good for You, its healthy-eating range.
Most categories, such as soft drinks, feature only one leading brand, but some - notably household care and bakery - none. There are few brands in canned goods, though several in one or two categories, such as alcohol.
John Knight, Essentials range manager, says: "We've used analysis from across the chain as well as consumer research to identify top performing lines. Our customers couldn't live without brands such as Nescafé, Heinz and Mars, but there are some brands, such as baby food, that we don't do. In laundry, Asda brand sells more than leading brands Persil, Ariel and Bold, which sell in roughly similar quantities. Including one risked disenfranchising the other two, so we left them out."
Penguin biscuits are another brand casualty, a gondola end given over instead to Asda's own label rival Puffins; ditto Tetley Tea Bags
The dearth of branded goods is made more striking by the number of facings and the depth of stock on shelf. Although fixtures and fittings are all standard, the shelving is the deepest Asda uses, allowing it to hold up to 10 days' worth of stock on shelf.
Asda's low price agenda is impossible to miss. The whole wall behind the tills is devoted to a chart comparing prices with local rivals. PoS material unique to Essentials also hammers home the price message. As well as shelf-edge labels urging shoppers to 'Try me, love me - or your money back', Asda has playfully manipulated big brand slogans in claims such as 'nine out of 10 cat owners prefer low prices' and 'possibly the best value lager in Northampton'. Its cheekiness hasn't gone down well with everyone, though. Some of the material has reportedly been stolen by disgruntled branded suppliers or rival retailers.
Fortunately, shoppers have reacted more positively. Asda estimates that 8,000 shoppers used the store last week and says that most were doing a weekly rather than top up shop.
The key to success is being the cheapest in town, says chief financial officer Judith McKenna, who confirms that though prices are in line with those across the estate, store managers have the authority to undercut the local opposition where necessary. Keeping running costs low is another priority, she says, which is why the store employs just 30 staff compared with 500 in a standard store.
She is confident that Asda's customer service will differentiate it, but concedes: "Replenishment is going to be one of the big tests, along with good customer service."
The next Essentials is due to open in Pontefract on May 15, with up to four more trial stores expected by the end of the year.