Asda enters convenience market with EG trial

LONDON (Reuters) - Asda, the British supermarket arm of Walmart WMT.N, plans to enter the fast-growing convenience stores market through a trial with petrol forecourt operator EG Group, it said on Friday.

FILE PHOTO: Branding is seen on a shopping trolley at an Asda store in west London, Britain, April 28, 2018. REUTERS/Toby Melville/File Photo

While Asda's sales have increased during the COVID-19 pandemic, it has lagged the growth of its big four rivals, market leader Tesco TSCO.L, Sainsbury's SBRY.L and Morrisons MRW.L, partly because, unlike them, it does not have a convenience stores offer.

Local convenience stores have thrived during the crisis as Britons shop closer to home.

The convenience market is forecast to grow by 13.2% to 46.4 billion pounds in the three years to 2022, according to researcher IGD.

Asda’s new convenience offer branded “Asda On the Move” will initially be trialled at EG Group fuel station forecourts in Ashby, Leamore and Primley in central England.

EG operates over 340 freehold-owned forecourt sites across the UK, giving plenty of scope for a roll-out.

Asda also said it would collaborate with home improvement group Kingfisher kGF.L, trialing four "shop within a shop" compact B&Q stores within Asda superstores.

The first two will open in Dagenham, east of London and Sheffield, northern England later this year.

Asda also has partnerships with baker Greggs GRG.L and delivery firm Uber Eats.

Walmart, whose attempt to sell Asda to Sainsbury’s for 7.3 billion pounds was thwarted by Britain’s competition regulator last year, is in talks with potential buyers of a majority stake in the supermarket chain.

Reporting by James Davey; Editing by Kirsten Donovan