The High Court battle between Asda and the Midlands Co-operative over the new Asda store in Thurmaston, Leicestershire, moves on to the next stage on March 31, when the new store opens.
CACI's analysis of the potential impacts from the 45,000 sq ft Asda appears to support part of the case put forward by the Midlands Co-op ­ that local Co-op stores are likely to feel very considerable impacts, as illustrated by the chart (bottom right).
The Midlands Co-op has many stores in the area, ranging from the superstore within a stone's throw of the Asda at Thurmaston to a large portfolio of convenience stores. The majority of the reduction in turnover will be felt by the Thurmaston superstore and Syston supermarket, as the Co-op had anticipated. CACI anticipates a reduction in weekly turnover in excess of 45% in each store.
However, it is Tesco, with four stores impacted by Asda, including two Tesco Extras, that is likely to have the largest drop in value sales, albeit less than the Midlands Co-op in percentage terms.
The competition from the major players, closer to the more urban areas of Leicester, Loughborough and even Melton Mowbray, channels the Asda catchment to the more rural areas where competition is weakest. This is most often the areas in which only the Co-op is located.
The catchment impacts shown on the map are sizeable. The Thurmaston Co-op is likely to see a drop in its market share in the two postcode sectors to the north of the store of between 40% and 60%. The impacts drop away further from the store, but it is the local impact that would most threaten the viability of the store.
This model does not incorporate local factors about the store environment, or knowledge of the loyalty of the customer base to either of the competing fascias. Therefore, it is possible that with careful marketing and careful pricing the Midlands Co-operative could restrict the damage.
Asda's new store edges it into the lead for local market share. The illustration below reveals it is likely to take 26% of available supermarket spend from its catchment. Tesco is not far behind at 24%. Sainsbury has 11% of sales from within the catchment, and the Co-ops are relegated to joint fourth, with Safeway.