Wal-Mart already has its eyes on a move into the Irish Republic following Asda’s acquisition of 12 Safeways from Morrisons in Northern Ireland this week.
Speaking to The Grocer before the annual shareholders’ convention in Bentonville, international president John Menzer said there was potential for an imminent move.
And in a U-turn on previous statements, he hinted Asda could become the backbone for some of the retailer’s future international expansion, fuelling speculation that a deal in the Irish Republic could be sealed within months and mark Asda’s first foray on to the international scene. “It is possible that Asda
could go beyond the UK,” said Menzer. “It is a good brand.”
According to trade sources in Dublin, Asda officials have already carried out soundings south of the border. There have
been unconfirmed reports of an approach to one chain and of contacts with logistics operators. The trade sources suggest Asda’s strategy would be to buy an established player and then expand organically. In recent years, Wal-Mart has been linked with a possible takeover of Dunnes, the family-owned chain that is number two in the Irish Republic with a 22.7% share.
A more likely target, say observers, is Superquinn, with 20 stores and 9% market share, and recently purchased for E450m from the Quinn family by Irish investor consortium Select Holdings. With some of its members involved in property rather than retail, a profitable resale could be on the cards.
With an economy growing at over 5% - the highest in the EU - the Republic would represent an attractive proposition for Asda. Its E6.5bn grocery market is dominated by Tesco, which has a 26% share. Its Irish sales rose 12% last year to E2.14bn.
Meanwhile, Asda’s trading and marketing director Angela Spindler said the retailer intended to use its recent experience with smaller store formats to bring a wide offer, including George, to its new customers in Northern Ireland following its £73.6m deal for 12 of Morrisons’ 13 stores. It chose not to include Downpatrick because of its poor condition.
The stores range from 14,000 to 30,000 sq ft. Asda plans to spend £30m refurbishing them before opening the first four in September. The rest will be trading by Christmas.
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