UGO store, Eston (4 May 2011)

The 20-strong chain of UGO supermarkets is to be snapped up by “a well-known and established brand name”, I understand.

Subject to legals being completed within the next couple of days, all the stores traded by UGO Stores Limited will transfer into the ownership of a new – and as yet unnamed – operator. All store staff will transfer under TUPE to the employment of that operator, though a number of staff at the current UGO head office are expected to lose their positions. It’s not clear whether the UGO brand will be retained, or whether the stores will be rebadged under the new owner’s established fascia.

Signage at UGO store, Eston (4 May 2011)

I understand that UGO’s owner, Arthur Harris, had previously entered discussions, in September, with a national retailer that had expressed an interest in acquiring a major shareholding and substantially investing into the UGO business, in order to secure its future and expansion. However, I’m told that the potential purchaser pulled out of that deal on 11 January – a day ahead of the planned completion date – leaving UGO in what Harris has described as “a very difficult trading position”.

Today’s news comes almost exactly a year since UGO’s press launch, when the fledgling chain’s bosses announced their plans for the tranche of ex-Netto stores that they had acquired. Pledging to be “the icing on the Netto cake”, UGO took over 20 of the 47 sites that Asda was required to divest for competition reasons following its takeover of the Danish hard discounter, including four North East stores at Stanley, Ashington, Eston and Hartlepool.

UGO store, Stanley (2 Dec 2011)

After what Harris admitted were some early “mistakes”, there were signs of improvement instore – in terms of product, offers, price and customer experience – when I visited four of the Hull and Barnsley sites back in November. More recently, however, there has been continued speculation about the business’s prospects, with several Soult’s Retail View readers reporting depleted stock levels at their local stores.

Basket POS at UGO Monk Bretton (11 Oct 2011)

While the ex-Netto stores taken over by Asda and Morrisons seem to have been a big success – taking advantage of those retailers’ existing scale, pricing muscle and familiar brand – UGO, as a small and new operator, has struggled to make a lasting impression, despite doing a good job with its POS materials and local marketing campaigns.

UGO ad in Hull Daily Mail, October 2011

Price, ultimately, seems to have been one of the major factors behind the chain’s struggle to maintain sales: adopting a Netto-style hard-discounter model was always an ambitious idea, yet UGO’s supply arrangements – with 85% of stock sourced from Nisa – just didn’t give it the room it needed to be highly competitive on everyday pricing.

Harris – who will play no future part in the UGO business – believes that the overall economy has also been a factor, however. Speaking to me today, he said:

“I believe there is very strong evidence to show that the sector has worsened dramatically since we embarked on the UGO journey a year or so ago. It was always going to be a challenge but one I feel we would have achieved in normal trading conditions.

“I wish everyone who was part of UGO and gave everything to achieve that challenge all the very best for the future and thank them again for their huge commitment.”

Tindale & Stanton logo

A family-run bakery and supermarket supplier based in County Durham has been saved from closure.

Bakery Products Limited has acquired the assets and goodwill of Hobson Foods Limited (in administration), which traded as Tindale & Stanton. The new business will continue to trade as Tindale & Stanton Limited from its existing premises in Burnopfield, near Gateshead. Bakery Products already owns the Woodhead Bakery in Scarborough, which it rescued from administration earlier this year, and has gone on to become a major supplier to the UGO supermarket chain.

Woodhead store in the bakery's native Scarborough (24 Jun 2011)

A familiar brand to many in the North East, Tindale & Stanton is a long-established, traditional baker originally founded by Bill Tindale. Serving the region for over 25 years, there are two main parts to the business: supply of a full range of bakery products to local retailers, fish and chips shops and cafés via its modern refrigerated vehicle fleet; and a wholesale division supplying a number of national supermarket chains and retailers with branded pies and baked goods.

In August this year, the company unveiled a ‘beef and broon’ pie, made with locally sourced Mordue ale and Northumbrian beef, and sold in Asda stores across the North East – part of a range that the new owners intend to retain and grow.

In recent years, however, Tindale & Stanton has also faced some challenges. After the business collapsed into administration in 2008, former managing director Peter Frankland formed Hobson Foods to rescue the business’s production facilities in Burnopfield and Gateshead, and 160 of its 300 jobs. A year ago, the smaller Gateshead bakery was closed, with its 16 staff transferred to the headquarters on Burnopfield’s Hobson Industrial Estate.

Last year, the business reported a slightly increased pre-tax profit of £122,689 on sales of £7m for the year ending May 2010. I understand, however, that recent sales have suffered as a result of lost business following Asda’s takeover of Netto. Tindale & Stanton was previously a major supplier to Netto, accounting for annual sales of £2.5m – or more than a third of its total turnover.

Netto store in Gateshead

Commenting on the acquisition, a spokesperson for Bakery Products told Soult’s Retail View:

“When Hobson Foods became available, we saw a unique opportunity to save a successful business that shares our traditional family bakery ethics.

“Tindale & Stanton will complement and enhance the current range offered by the Woodhead Bakery. The two businesses have strong synergies in that each is well known and respected in its respective geographical area with a focus on quality, range and value for money

“The acquisition also facilitates economies of scale through shared management and resources and opens up a variety of new opportunities to grow the Bakery Products business.

“It is planned that the 122 Tindale & Stanton staff in place when the acquisition was agreed will retain their positions. However, we understand that, regrettably, a small number of redundancies have taken place over the last few weeks.

“This is the start of a brand new era for the business which we firmly believe has a very bright future.”

As I reported earlier this month, Woodhead-branded bread, cakes and pies have already been selling well in UGO, with customers seemingly appreciating the freshness, value and local provenance of the products.

Woodhead bread products at UGO Boothferry (11 Oct 2011)

As well as securing a successful wholesale business, the purchase of Tindale & Stanton – whose products are already sold in UGO shops – provides further interesting vertical integration opportunities for the 20-strong UGO supermarket chain as it seeks to lessen its reliance on Nisa-sourced products.

Soon-to-be Heron Foods, Wallsend (15 Nov 2011)

After much speculation, family-owned frozen food specialist Heron Foods has revealed itself as the new occupant of Wallsend’s former Woolworths store.

Following my visit two months ago, I reported that the property at 2-4 High Street East – vacant since the shortlived Well Worth It moved out – had gained a ‘let agreed’ sign. Then, by a fortnight ago, the shutters had been painted blue and the Well Worth It signage removed, revealing traces of old Woolworths lettering underneath.

Former Woolworths, Wallsend (22 Sep 2011)

Former Woolworths, Wallsend (4 Nov 2011)

Now, following a helpful Twitter tip-off from @waiteIT, I was able to pay a return visit to see the store’s new Heron Foods signage in place. It’s just a coincidence, of course, but the building’s blue and yellow cladding is a much better match for Heron Foods’ corporate colours than it ever was for Woolworths’.

When I visited, there was no indication on site of when the store would open, and the publicity-shy retailer’s web presence – just an ‘under construction’ page – means that information on Heron Foods and its 160+ (and growing) stores can be hard to come by. However, one quick call to the head office number and I was able to find out that the Wallsend store is set to open this coming Monday, 21 November.

Heron Foods website (17 Nov 2011)

The reuse of any former Woolworths is good news, but the arrival of a new supermarket on Wallsend High Street makes the story doubly significant. As I’ve noted before, Wallsend town centre was dealt a blow when the Co-op supermarket closed in 2009, and Morrisons – who had bought the site – aborted plans to open in its place. The recent conversion of the town’s Netto to Asda has partly helped to plug the gap, but its location, in Hadrian Road, means that there are limited footfall benefits for the High Street proper.

With the planned redevelopment of the Forum shopping centre – including a new, large supermarket – not expected to complete until at least 2013, Heron Foods’ move onto Wallsend High Street is a canny one. Its value offer – increasingly featuring dry as well as frozen goods – is likely to appeal to cost-conscious local shoppers, while the decent-sized ex-Woolies store is big enough to feature a wide product range.

The retailer will surely be hoping that by the time any new competitor opens, Wallsend’s shoppers have already got themselves into the Heron habit.

Signage at UGO Lundwood (11 Oct 2011)

The emergence of UGO as Britain’s newest discount supermarket chain has been one of the most interesting retail launches of 2011 so far.

Back in January, I reported on Asda’s OFT-instigated divestment of 47 Netto stores, and the news that Haldanes would be buying 20 of those sites for a new discount fascia, UGO. Subsequently, I wrote about Haldanes’ intention to make UGO “the icing on the Netto cake”, seeking to keep the best of Netto – including its familiar yellow and black corporate colours – while bringing in an enlarged product range and additional services.

UGO’s birth hasn’t been straightforward, however. When I visited the Eston and Hartlepool shops, on Teesside, in May, I praised the stores’ external appearance and great offers, but highlighted some concerns regarding availability, instore signage and customer service.

Woodhead Bakery cakes at Lundwood (11 Oct 2011)

Two months later, when I interviewed UGO’s boss, Arthur Harris, he was having to contend with the fallout from the collapse of the eponymous Haldanes chain, as well as a need, in his own words, for the UGO stores “to trade a little bit better”. He promised, however, that “every fix possible” would be looked at, addressing key issues such as IT and ordering, product range and price, and developing vertical integration by introducing bread, cakes and pies from the recently acquired Woodhead Bakery.

A few weeks ago, at UGO’s invitation, I went to visit some UGO stores – Lundwood and Monk Bretton in Barnsley, and Eton Street (Boulevard) and Boothferry in Hull – for the first time since my Teesside trip. I was keen to see how the stores were getting on; look at what had changed from five months earlier; and have a chat with the store’s managers and staff.

So, how did the Barnsley and Hull stores fare under the five headings that I’d reviewed before: first impressions; instore signage; product range and availability; price; and customer service?

First impressions

UGO Lundwood (11 Oct 2011)

On Teesside, I praised both UGO stores’ bold and bright exteriors, and the Barnsley and Hull stores didn’t disappoint in this regard. As I observed before, UGO’s visual identity is clearly and openly inspired by that of Netto, but Darlington-based agency Charles Hollywood has done a great job of creating an overall look that combines eyecatching signage with banners and window vinyls. All four of the stores that I visited were highly visible – and very hard to miss – when arriving by car.

UGO, Monk Bretton (11 Oct 2011)

To complement the permanent signage and banners, each of the stores was recently given a £200 budget to spend as they saw fit on materials to promote October’s ’3 for £10′ wine offer – a clever way of both engaging the store teams and, potentially, coming up with some new and creative promotional ideas.

UGO Lundwood window poster, October 2011

While some stores opted for leafleting, window posters or PR activity, Monk Bretton’s huge banner – impossible to miss from the roundabout adjacent to the store – probably wins the prize for making the biggest impact.

Banner at UGO Monk Bretton (11 Oct 2011)

Happily, all the promotional activity does seem to be having the desired effect in generating awareness of UGO and, in turn, an increase in footfall and spend. While I was visiting the stores, there were decent numbers of people arriving both by car and on foot. Not enough to make the stores or their car parks really busy yet, but certainly an improvement on the occasionally eerie quietness that I experienced in May. This is backed up by UGO’s own figures, which show impressive week-on-week sales growth in the fortnight proceeding my visit, including a 36% increase at Nuneaton, 31% at Ashington and 26% at Stanley.

UGO Eton Street, Hull (11 Oct 2011)

The quality of the estate that UGO has inherited from Netto is also an advantage in creating a positive first impression and drawing shoppers in, with the buildings themselves looking smart and appealing. While the Eston store that I visited previously felt comparatively small and dark, this seems to be the exception rather than the rule.

UGO Boothferry (11 Oct 2011)

Apart from the slightly older-looking Boothferry shop – which, like Eston, shares a parade with other retail units – the UGO stores that I visited in Barnsley and Hull are good-sized, modern stores, more comparable in look and feel to the Hartlepool branch. Monk Bretton, for example, only opened as Netto in 2008, while Lundwood benefited from a major refurbishment in the same year.

UGO Lundwood (11 Oct 2011)

On entering the stores, the bright and modern feel continues. Where the ex-Netto stores taken over by Asda and Morrisons have enjoyed a comprehensive internal refit, UGO’s ‘Netto-plus’ model relies on the existing walls, flooring, ceilings, shelving and equipment being in good shape – which they generally are. Where UGO is doing especially well, however, is in maintaining the overall tidiness and cleanliness of its stores. Netto’s shops sometimes had a reputation for being messy, and the spotlessness of the stores as UGO is apparently one of the main differences that shoppers have noticed, and welcomed.

Entrance of UGO Monk Bretton (11 Oct 2011)

Of course, a cynic could argue that because business is still quieter than it was as Netto, the stores have less chance to get dirty and the staff more time to keep them clean. It’s not a given, however – there are plenty of other stores where lack of customers doesn’t translate into a spick-and-span shopfloor, and the UGO managers’ evident pride in their store environments is commendable.

Instore signage

Basket POS at UGO Monk Bretton (11 Oct 2011)

After visiting Hartlepool and Eston in May, I praised the way in which the UGO brand was implemented instore, with a consistent colour palette and tone of voice running throughout the posters, navigational signage and other point-of-sale materials. Pleasingly, this is the case in Barnsley and Hull too, from the fun ‘UGO for a basket’ cutout that greets you at the entrance to the ‘Mind how UGO’ exhortation as you leave.

UGO Eton Street, Hull (11 Oct 2011)

I particularly like the good-quality UGO-branded doormats, which add a splash of colour as you enter the stores, and help to prevent the floors getting too slippy. On the very wet day that I visited, the mats were looking a bit mucky from all the dirty feet that had used them – as long as they clean up OK, however, it shows that they’re doing their job.

Welcome mat at UGO Boothferry (11 Oct 2011)

Amid a generally high level of attention to detail, the scrappy handwritten signage that I previously spotted at Eston and Hartlepool stood out for the wrong reasons. Pleasingly, however, there was no sign of anything similar in the Barnsley or Hull stores.

Current product signage is a combination of centrally- and instore-produced A4 posters, and I spotted a variety of approaches while visiting the four stores. The centrally-produced posters were typically red and black, and stood out well against the yellow backdrop; in contrast, the instore-produced signage at all four stores, printed on plain white paper, was neat but a little lacking in professionalism. In a few cases, I also spotted a need for a proofreader to catch some of the misspellings before they make it onto the shopfloor!

Product signage at UGO Lundwood (11 Oct 2011)

At Eton Street, I noticed some of the old Netto ‘Discount Price’ paper being used up, and the yellow and red colour scheme works well in allowing the store-produced signage to fit better with the overall look and feel of the UGO brand. I’m told that UGO is about to produce its own A4 poster template, featuring a red frame around a yellow field, and this will be a welcome replacement for the underwhelming white posters in due course.

Ex-Netto paper used at UGO Eton Street (11 Oct 2011)

Another effective visual device in all the stores is the UGO-branded ‘pallet wraps’. At Lundwood, for instance, the store was using long stretches of the wraps around its promotional and non-food sections, which worked well, as intended, at disguising the unattractive pallets.

Pallet wraps around the non-food section at UGO Lundwood (11 Oct 2011)

However, I especially liked the way that Eton Street had used the wraps in shorter stretches, around its end-of-aisle displays. This seemed to work really well in creating a visual link with the other yellow elements of the store, and particularly in drawing the eye down the centre aisle.

Pallet wraps at UGO Eton Street, Hull (11 Oct 2011)

Attention to detail is important here – making sure that the wraps are clean, that the corners are neat and sharp, and that the wraps don’t (as I spotted in one store) overlap in such a way that the text is partly obscured.

Product range and availability

Fruit and veg at UGO Monk Bretton (11 Oct 2011)

Gaps on shelves were a problem when I visited the UGO stores in Hartlepool and Eston in May. However, a combination of sorting out the chain’s IT and ordering systems, and some judicious pruning to what Arthur Harris quickly recognised was an over-ambitious product range, seems to have done the trick. The fruit and veg sections – problem areas at both Eston and Hartlepool five months ago – were well equipped in all four of the Barnsley and Hull stores that I visited.

Hessle Road Woodhead branch, close to Eton Street UGO, Hull (11 Oct 2011)

Perhaps the biggest product change, however, is the introduction of Woodhead Bakery ranges across all the stores. This is a real point of difference for UGO, given that Woodhead-badged products have previously only been sold through the bakery’s own stores across the north of England. However, the purchase of the bakery by UGO’s parent company earlier this year has created great opportunities for vertical integration, as well as the ability to capitalise on a familiar and respected northern brand. Just around the corner from Eton Street’s UGO, for example, I spotted a Woodhead branch on the busy Hessle Road.

Woodhead bread products at UGO Boothferry (11 Oct 2011)

Given the benefits to the wider Haldane Retail Group, UGO’s store managers are, as you would expect, being encouraged to push the Woodhead ranges, and all the stores I visited had products such as bread, rolls, fruit pies and cakes prominently displayed.

Woodhead rolls at UGO Eton Street (11 Oct 2011)

Woodhead rolls at Boothferry (11 Oct 2011)

All the store managers I spoke to reported that the Woodhead ranges were selling really well, and it’s not surprising – the products look fresh and attractive, and are very competitively priced.

Woodhead apple pies at UGO Lundwood (11 Oct 2011)

One of the biggest sellers is apparently the 12-pack of white rolls for £1, while the large apple pies for £1 were also attracting plenty of attention. These prices are almost identical to those in Asda, so are very reasonable for a smaller chain. The 4-pack of Woodhead frozen chicken pies for £1.79 also seemed like a great deal – combining the convenience of frozen with simple packaging that lets the product, and its ‘homemadeness’, speak for itself.

Frozen Woodhead pies at UGO Eton Street (11 Oct 2011)

Price

That issue of price is clearly at the heart of UGO getting its offer right, given that it’s modelling itself on Netto and uses “where the prices are low” as its strapline.

Bacon deal at UGO Monk Bretton (11 Oct 2011)

When I interviewed Arthur Harris in June, he admitted that UGO needed to address the perception – and, to some extent at least, the reality – of it being more expensive than Netto.

Baked bean deal at UGO Lundwood (11 Oct 2011)

Again, there seems to be good progress on this front. One of the barriers to being able to offer lower prices has been UGO’s reliance on sourcing products via Nisa, the buying group for independent retailers that also supplies many corner shops and, for example, the Beales Food Hall in Hexham.

Since UGO’s launch, however, I understand that the proportion of SKUs sourced from Nisa has dropped from more than 90% to around 85% – partly as a result of the Woodhead-supplied ranges, but also through sourcing selected grocery and non-food items direct from other suppliers. Deals on bacon, baked beans and large tins of biscuits were among the non-Nisa sourced offers instore when I visited, all of which were selling well.

UGO also seems to have got cleverer in promoting and, in turn, delivering upon its best offers. Last time, I complained that some of the deals featured on the offers leaflet were difficult to locate instore, but a combination of better POS materials and giving more powers to the store managers seems to have done the trick.

Wine offer display at Eton Street (11 Oct 2011)

My understanding of how Netto worked is that store layouts and promotions followed quite a prescriptive set of rules, and there was limited scope for the store managers to tailor those to their local market. UGO’s approach, in contrast, is to give store managers greater control. At the two Barnsley stores, for example, one store manager reported doing a roaring trade in beer, while the other sells much more wine; this can now be reflected in terms of which offers are given most prominence in store. In Monk Bretton, for example, the store manager had made use of surplus fridge space to create a section of chilled wine, which he reported was selling well.

Chilled wine at UGO Monk Bretton (11 Oct 2011)

Indeed, when I visited, all the stores were making a big push on the 3 for £10 wine offer that I mentioned before, reinforced by the door-to-door leaflet deliveries and newspaper adverts in those locations where UGO has multiple stores – namely Barnsley, Hull and Liverpool.

UGO ad in Hull Daily Mail, October 2011

As the sales uplifts show, the wine offer has been a really successful footfall driver – after all, it is a good deal. More importantly, UGO will be hoping that by bringing lapsed Netto or UGO shoppers back into the store – and, perhaps, attracting some completely new customers – it will open shoppers’ eyes to how the overall offer has improved from those early days.

Customer service

Checkout at UGO Eton Street (11 Oct 2011)

Finally, to customer service – another area where there were shortcomings last time. In Eston and Hartlepool in May, the staff didn’t seem particularly happy, perhaps because they were having to deal with customers who appeared confused by the change from Netto, and who were complaining about the relatively poor levels of availability.

Five months on, and I couldn’t have been more impressed by the store managers and other staff that I met. In each of the four shops that I visited, the managers were motivated, enthusiastic, and clearly proud of their stores. Staff on the tills were also actively promoting the current offers, such as the deals on wine and tinned biscuits. In all the stores I visited, only the security guards – typically – struggled to raise a smile.

Wine offer at UGO Monk Bretton checkout (11 Oct 2011)

Despite the customer service shortcomings, one of the features I praised at Eston and Hartlepool last time was the smartness of the staff, and that was the case in Barnsley and Hull too. The staff uniforms – especially the bright yellow shirts – are eyecatching and good quality, which helps to convey a professional and positive image.

Conclusion

To truly make a direct comparison with my previous UGO visit, I’ll need to go back to Eston and Hartlepool again. However, from what I saw at the four stores that I went to in Barnsley and Hull, there have been tangible improvements to UGO’s offer and customer experience:

• The prices and offers are better, and are being more actively promoted both inside and outside the store
• The new Woodhead ranges are a real asset, and seem to be going down well with customers
• The stores look appealing, thanks to their staff and managers – who are superb – having a real sense of ownership.

Of course, there are still things that need more work. Last time I lamented the lack of any UGO-branded carrier bags, as it’s such an easy way to let customers promote the brand as they walk to and from the store. Apparently there have been some UGO-branded bags since my last visit, but the quality was poor, and some better ones are currently being sourced. Nisa bags are being used in the meantime.

There’s obviously also a need to get the stores trading better, but at least now there’s every reason to expect that customers will like what they see once they step through those doors. The success of the recent wine deal has shown that new and lapsed customers alike can be enticed back if the offer and pricing is right.

Above all, I think there’s a sense that UGO is starting to work out what it’s trying to be, and is establishing a brand personality and identity distinctive to that of Netto from which it has evolved. With recent changes to the top team and more power to store managers seemingly having the desired effect, UGO appears to be on the right track – it just needs to keep doing what it’s doing, and to keep doing it smarter and better.

Tesco in Eger, Hungary (15 Jul 2006)

Today’s release of fairly weak UK trading figures from Tesco – where like-for-like sales, excluding petrol and VAT, fell by 0.5% in the first half of the year – has unsurprisingly prompted much media discussion, both about Tesco specifically and the state of the UK economy more generally.

Tesco’s coverage hasn’t been helped by rival grocer Sainsbury’s revealing that its own like-for-like sales, excluding petrol but not VAT, rose by 1.9% in the first six months of the financial year (a measure for which the equivalent at Tesco was a 0.5% rise).

As new Tesco boss Philip Clarke noted, there’s no doubt that retailers across the spectrum are having to eke every penny of spend out of cautious shoppers at the moment, with further gloomy figures on household consumption released today. The big question, however, is why the UK performance of Tesco – a retailer that has long been the behemoth of the British supermarket sector – is seemingly lagging behind that of major rivals such as Sainsbury’s.

Tesco Express, Lyme Regis (4 Sep 2011)

Before trying to answer that question, it’s worth reminding ourselves that Tesco as a whole remains a phenomenally successful business. Today’s figures showed that the company made a profit of £1.9bn in the first half of the year, on group sales of £35.5bn – a performance that most retailers can only dream of. Tesco’s store estate comprises more than 5,300 shops – half of those overseas – and it is now the third biggest retailer in the world, with a strong presence in Ireland, eastern Europe, Asia and the US. And for all that its UK performance is below par, Tesco’s market share remains more than that of Asda and Morrisons combined – thanks in no small part to the efforts of its 200,000 UK staff. As a homegrown international success story, Tesco has given the UK much to be proud of.

Tesco in Košice, Slovakia (2 Sep 2008)

However, it’s the business’s very immensity that also contributes to some of its present challenges. The perception that Tesco is simply too big – and too powerful – is widely held, not least here in the North East where it owns much of Gateshead town centre and holds the key to the centre’s long-awaited regeneration. There are clearly some shoppers who refuse to shop at Tesco for that reason.

In the UK, a significant chunk of Tesco’s growth in recent years has been built on expansion in non-food. This served the business well in the good times, but has arguably left it more exposed than its rivals now that discretionary spend is under pressure. There is also, I would suggest, some sense that Tesco’s expansion into new categories – whether that’s non-food, banking or used cars – has allowed others, such as Waitrose and the hard discounters, to up their game and become the innovators in the core grocery business.

Tesco-owned One Stop, Crewkerne (10 Sep 2011)

I touched upon some of Tesco’s challenges in grocery when I recently blogged about the Asda Price Guarantee, and Tesco, like Asda, is having to fend off rivals at both the premium and value ends of the market. For all its investment in price – including the eyecatching Price Drop campaign announced last month – my reckoning is that Tesco still faces an uphill struggle to be perceived as cheaper than Aldi, Lidl or even Asda. The proliferation of higher-priced Tesco Express stores – and the growth of the supposedly even dearer One Stop ‘stealth fascia’ – surely don’t help this perception. In contrast, Asda’s clear message about charging the same prices in its smaller stores as in the larger ones helps to cement its own value credentials.

What about quality? Here too, Tesco arguably has work to do. Just among my own circles of friends, I often hear perceptions of Morrisons being better than Tesco in fresh produce; Sainsbury’s as being a more ‘upmarket’ shop in general; and Waitrose – still a relatively recent entrant to ‘the North’ – as excelling in speciality products and treats. In contrast, Tesco’s dalliance with being ‘Britain’s biggest discounter’ and its recent launch of ‘venture brands’ – its own in-house products, but without a Tesco branding – overlaid with the familiar Value, mid-tier and Finest ranges, arguably create a confused picture of what Tesco stands for.

One of Tesco's discount brands

The one area where Tesco beats all its rivals is its long-established loyalty scheme, Tesco Clubcard. Reportedly boasting 15 million active cardholders, Clubcard provides the retailer with an unrivalled snapshot of UK consumers’ shopping habits, as well as a means of communicating targeted news and offers to its customers. Given the importance of Clubcard, the decision last week to scrap the Double Points promotion – and invest the money saved in immediate Price Drop reductions – is a bold if risky one. Tesco’s reckoning, perhaps, is that investing in loyalty is only worthwhile if shoppers are actually loyal – and don’t go off to Aldi, Lidl, Morrisons or Waitrose instead.

Back in the days when Prunella Scales’ Dotty was the face of Tesco’s TV advertising, there was a warmth and clarity about the Tesco brand – and even an affection for it – that has got rather lost in the intervening years. Today, Tesco’s rather cold and soulless stores seem like a metaphor for the brand.

Whether the recently announced initiatives will clarify what Tesco stands for – and win back those customers who have started to establish new shopping habits elsewhere – remains to be seen. However, given Tesco’s deep pockets, immense experience as a retailer, and past record of success, only a brave observer would write off its present efforts to bring the UK business back on track.

Point-of-sale promotion of the Asda Price Guarantee

Judging from the number of hits – currently 900+, and rising – many of you enjoyed my recent illustrated post about Asda’s Old Fold Road store in Gateshead, following its impressive transformation from a Netto.

While the increase in product lines and instore services is one of Asda’s selling points at its converted Netto sites, another is its pledge that “all newly converted Netto stores will charge the same low price as every other Asda in the UK.” This means that smaller Asda Supermarket sites, just like their full-size counterparts, are covered by the much publicised Asda Price Guarantee: the company’s pledge to be “10% cheaper on your comparable grocery shopping” than Tesco, Sainsbury’s, Morrisons or Waitrose.

Asda Supermarket, Gateshead (8 Aug 2011)

At the same time as I was checking out the Gateshead store’s new look, Asda challenged me to carry out a £50 shop instore – to put the Price Guarantee to the test, as well as seeing whether it really was possible to do a full weekly shop in a compact Asda. So, how did I get on?

My shopping list

Coffee at Asda Supermarket, Gateshead (8 Aug 2011)

To make the test as real as possible, I prepared a shopping list comprising many of the items that I buy on a regular basis and needed to buy anyway, including fresh fruit and veg, storecupboard items (e.g. olive oil, coffee, baked beans), crisps and nuts, household items (e.g. handwash, toilet rolls), frozen foods, cat food and wine, as well as ingredients for that evening’s dinner (sausage and mash).

A couple of qualifiers

Asda billboard, Gateshead (26 Jun 2011)

As I’ve mentioned before, I’m not usually an Asda shopper, but in the supermarkets I do visit – mainly Waitrose, Sainsbury’s, Morrisons and Aldi – I tend to go for own-brands over branded products. The ‘comparable grocery shopping’ proviso of the Price Guarantee reflects the fact that while it’s easy to compare the price of branded products in different supermarkets, own-brand comparisons are more tricky due to variations in pack size, ingredients or other characteristics. To ensure that my shop included as many comparable items as possible, I was therefore prepared to buy a few more branded items than would usually be the case.

Finally, it’s worth noting that the shop took place on 6 August; inevitably, all the prices and offers that I mention can only ever be a snapshot of that particular day, and may well have changed – up or down – since. All the photos are from two days later, when I returned to the store – unladen with shopping – for a more detailed look around.

Finding what I wanted… and a few other things

Pesto at Asda Supermarket, Gateshead (8 Aug 2011)

By and large, I was able to find everything on my list, though I did have to make a few substitutions where my chosen brand wasn’t available. For example, I couldn’t find any Pears handwash, so bought a similar Baylis & Harding product (£2) instead. I couldn’t see any Sacla green pesto either, so decided to abandon the pesto rather than opt for the slightly cheap-looking Asda own-brand alternatives.

Handwash at Asda Supermarket, Gateshead (8 Aug 2011)

In some other categories – such as meat sausages, vegetarian sausages, redcurrant jelly and, more surprisingly, potatoes – the options instore were a little bit limited, and you might well choose to go to a larger store if you were after a wider range or particular brands. On the other hand, it’s hard to imagine that the old Netto on the site would have sold vegetarian sausages or redcurrant jelly at all.

Belvoir Elderflower Pressé at Asda Supermarket, Gateshead (8 Aug 2011)

Alongside the items I planned to buy, I was also tempted by a few of the offers that grabbed my attention instore. Mr Muscle Window & Glass Cleaner (500 ml) for £1 seemed like a great deal, as did Belvoir Elderflower Pressé (75 cl) at two for £3.50 (compared to £2.20 for one) and Taylors of Harrogate coffee at two for £5 (instead of £3.28 each). The branded wines (Blossom Hill at £5 and Echo Falls at £4) also seemed keenly priced.

Finally, my cat, Sebastian, did well out of the shop too, with the price for Iams (£3 for 1kg) looking very attractive compared to what I normally pay.

In total, my shop comprised 38 different products, and came to £68.77 once the ‘two-for’ discounts were deducted.

Wanting to enter the details of my shop online… but not until tomorrow

Asda Price Guarantee website welcome screen (6 Aug 2011)

Watching the rather cheesy TV ad for the Asda Price Guarantee, you can be forgiven for thinking that all you need to do is arrive home, gather the other mums around, and immediately start comparing each others’ receipts.

The reality is a little less exciting, especially as you have to wait until at least 6am the morning after you shopped before inputting your details at the Asda Price Guarantee website. At the moment, neither the receipt nor the Price Guarantee website homepage flags up that you can’t compare your prices straight away; it’s only mentioned once you reach the ‘Enter your receipt details’ page via the welcome screen’s ’Enter Receipt’ button.

This, I would have thought, has potential to cause disappointment and annoyance, yet would be easily remedied by changing the receipts to read “Check your receipt online from 6am tomorrow at…” instead of the current “Check your receipt online at…”

Putting the Price Guarantee to the test… and interrogating the data

My shop *is* 10% cheaper (7 Aug 2011)

Needless to say, I waited with baited breath until the following morning when – finally – I could enter and check the details of my shop, a process that is clearly explained and takes just thirty seconds or so to complete. So, was my comparable shop 10% cheaper than it would have been at Asda’s competitors? Yes, it was, as the results screen above happily declared.

How my shop compared (7 Aug 2011)

Given the prominence of the ’10% Cheaper’ promise within the Asda Price Guarantee, I found it a little strange that the main results screen showed the difference between my Asda shop and the equivalent elsewhere in terms of actual money saved, rather than percentage. Hence, I could see (above) that my comparable items would have cost £8.87 more at Tesco or £6.62 more at Morrisons, but beyond knowing that the saving must be at least 10%, the precise percentage difference was not made clear.

Another thing that immediately struck me was the fact that I’d apparently saved £7.61 compared to Waitrose, but £8.87 compared to Tesco. Did this mean that Waitrose was cheaper than Tesco for the items I’d bought? Actually, no, it didn’t at all.

Receipt comparison details: Asda vs Tesco (7 Aug 2011)

For each of the other supermarkets, clicking the ‘View details’ link brought up a more detailed, item-by-item price comparison. Pleasingly, only three of the 38 items I bought turned out not to be comparable with any of the other supermarkets, a much smaller number than I expected.

The store-by-store breakdown showed that while the Price Guarantee had been able to compare 31 of my 38 different items against Tesco, it had managed to compare 29 against Sainsbury’s, 28 against Morrisons, and only 23 against Waitrose. If you’re interested in the full detail, I’ve created a PDF (Table 1) that shows the price comparisons for all the items that I bought.

In other words, the headline saving of £8.87 against Tesco was based on comparable items costing £54.27 at Asda. In contrast, the headline saving of £7.61 against Waitrose was based on a much smaller comparable basket, costing £39.89 at Asda. Hence, while it’s fine to compare the headline figures for any one of the other supermarkets with Asda, it’s not fair to compare those competitors with each other, simply because the basket sizes being compared are all different.

Tesco store, Gateshead (18 Jun 2010)

Asda would probably point out, of course, that the whole point of the Price Guarantee is only to compare its own prices with those of competitors, and that it doesn’t claim to compare, say, Tesco against Waitrose or Tesco against Morrisons. That’s fine, but I wonder how many other shoppers would have drawn the same initial Tesco vs Waitrose conclusion as I did from those headline figures?

Certainly, it’s another reason why it would make more sense for the initial results page to show the percentage savings relative to Asda’s competitors, rather than actual cost savings that have potential to confuse. Currently, however, the actual percentage savings against the other supermarkets are not stated anywhere in the results – I had to work them out myself by copying and pasting the data into Excel.

Morrisons came closest to beating the Price Guarantee

This is surprising, as in my case, at least, the statement that “Your comparable grocery shopping is 10% cheaper than Tesco, Sainsbury’s, Morrisons and Waitrose” actually underplayed the true extent of the saving. In percentage terms, Morrisons came closest to beating the Asda Price Guarantee, where I saved ‘only’ 12.2% by shopping at Asda. Tesco was next best (14% cheaper at Asda) followed by Waitrose (16%) and finally – perhaps surprisingly – Sainsbury’s (16.1%). Again, my PDF shows the detailed data from which I calculated these percentages.

Taking the impulse buys out of my comparison

Iams at Asda Supermarket, Gateshead (8 Aug 2011)

As I noted above, there were quite a few items in Asda that I bought on impulse because they seemed like really great deals. It turned out, for example, that the £3 bag of Iams was £1.41 cheaper in Asda than its nearest competitor (Sainsbury’s), and a full £2.50 cheaper than Waitrose [see full breakdown]. While great for me, as the customer, including such items in the test inevitably gives Asda a head start in meeting its ’10% cheaper’ pledge.

So, what happens if I exclude those impulse purchases from the comparison and just test the Price Guarantee on the items on my shopping list? Well, Asda still came out top, but obviously by a bit less than before:

• 5.9% cheaper than Morrisons on my comparable shopping-list items
• 7.8% cheaper than Tesco
• 10.1% cheaper than Sainsbury’s
• 10.3% cheaper than Waitrose.

I’ve prepared a second PDF (Table 2), which makes clear the items that I excluded from each comparison. Again, bear in mind that the percentages above are only really meaningful in terms of comparing Asda to each of its competitors, not the competitors with each other.

Testing the data a third way 

Of the five supermarkets, Waitrose was cheapest on the fewest items

Having established that Asda was indeed cheapest across both my entire shop and the shopping-list items, I thought it would be interesting to look at which of the five supermarkets was cheapest on a product-by-product basis. You can see the results of my analysis in a third PDF (Table 3).

For each of the 35 comparable products that I bought, I ranked the five stores 1 to 5, where 1 was the cheapest supermarket and 5 was the most expensive. If two or more stores tied for the cheapest price, then both were ranked 1. If a product was only available at, say, three of the five stores, then I ranked these 1 to 3. So, which supermarket came out best by this measure?

Impressively, Asda ranked #1 for price on nearly two-thirds (23, or 66%) of the 35 comparable items that I bought, and was #2 on all but two others. Only the iceberg lettuce (cheaper at both Tesco and Morrisons) and the McCoy’s crisps (cheaper at Tesco and Sainsbury’s) let the side down.

Of Asda’s competitors, Tesco ranked #1 on 13 (i.e. 42%) of the 31 comparable items that I bought, while Morrisons was close behind with #1 ranks on 11 (39%) of 28 comparable items.

In contrast, Sainsbury’s (#1 on 7 (24%) of 29 comparable items) and Waitrose (#1 on just 4 (17%) of 23 products) performed least well by this criterion.

Conclusions

Self-service checkouts, Asda Supermarket, Gateshead (8 Aug 2011)

My test has exposed a few ways in which the Asda Price Guarantee website could potentially be improved, most notably in signposting the overnight wait more clearly, and in limiting scope for misinterpretation by presenting the headline savings against Asda’s competitors in percentage rather than cash terms. Where Asda is significantly more than 10% cheaper, as it was in my case, it also seems odd for this to be underplayed.

These quibbles aside, the Asda Price Guarantee is clearly a worthwhile and quite fun tool that is relatively easy for customers to use, and that helps Asda makes its point about price.

Whichever way you look at it, it’s also hard to dispute that I got a good deal by carrying out my weekly shop at Asda. The Price Guarantee’s ’10% cheaper’ pledge worked as promised – even in a small-format Asda Supermarket – and the analysis of my particular shopping basket, using my three different methods, seems to demonstrate the keenness of Asda’s prices relative to its competitors. Value is, and always has been, a key componenent of the Asda offer, and the Price Guarantee helps to ensure that Asda’s price credentials are widely understood among shoppers.

Herein, however, lies the problem. If Asda is indeed the cheapest of the big grocers, and shoppers recognise this, why is it continuing to lose market share?

Aldi and Lidl continue to gain

Could it be that in bigging up its Price Guarantee, Asda is actually attacking the wrong target? Look at the latest Kantar Worldpanel data, and the big gainers continue to be Aldi (with annual sales growth of 24.4%), Lidl (up 13.8%) and Waitrose. As Tesco and Asda slip, Aldi, Lidl and Waitrose have each recorded record market shares of 3.6%, 2.6% and 4.3% respectively.

My analysis indicates that Waitrose struggles to compete with Asda on price – but no-one would really expect otherwise. Shoppers love Waitrose for the customer service, the pleasant store environment and the quality products that you simply can’t get anywhere else.

Meanwhile, Aldi and Lidl win no awards for their store interiors, but the shopping experience is quick and efficient, and the stores are thriving as shoppers discover own-brand products that are eyecatchingly cheap yet surprisingly high in quality. A Price Guarantee based on ‘comparable’ items is therefore slightly undermined when shoppers are increasingly buying exclusive and ‘incomparable’ products from Aldi, Lidl and Waitrose.

Price is important, of course – especially in economically challenging times – but so is the quality of the products and the overall shopping experience. Asda, I would argue, needs to focus increasing attention on these last two factors.

One of Tesco's discount brands

Tesco’s reaction to the rise of Aldi and Lidl was to launch its own Discounter range, which worked for a while but came across as desperate, and muddied the chain’s “good, better, best” own-label strategy. Asda, wisely, has avoided such a confused approach, opting instead to highlight the price credentials of its existing ranges through the Price Guarantee.

Crucially, Asda has also started to recognise that the quality of its own mid-tier brands – or, at least, customers’ perceptions of the quality – is one of the areas where it is weakest relative to its competitors, and where Aldi, Lidl and Waitrose all present a threat. Asda’s response has manifested itself in the ‘Chosen by You’ label, launched last year, though extending the brand to too many categories – such as refuse sacks – does risk undermining any potential benefits.

Large Asda at Gateshead's Metrocentre (31 Mar 2010)

However, even once it’s convinced potential customers of its keen prices or improved quality products, Asda needs to keep getting more of those customers through the doors – possibly a bigger hurdle than you might think.

Chatting to my friends and colleagues about retail, as I have a habit to do, their first reaction to Asda often relates to it being a busy, stressful and unpleasant shopping experience – a point that I’ve previously made myself in relation to the vast Metrocentre store at the opposite end of Gateshead. It’s hard to know how widely-held this view is, but it’s a factor that drives at least some shoppers elsewhere.

If that’s the case, the small-format Asda Supermarket model may have unintended benefits. As I remarked after my visit to the new Gateshead store, there is something rather nice about shopping in an Asda that is attractively laid out and isn’t overwhelmingly large and busy. Could this, as much as the range and convenience, account for the converted Netto stores’ apparent uplift in sales to date?

If it is, it may well be through the growth of the Asda Supermarket format – rather than the traditional sheds, packed with non-food – that Asda succeeds in turning around its shrinking market share.

Interior of Asda Supermarket, Gateshead (8 Aug 2011)

While some communities on Tyneside – among them North Shields and Wallsend – still have to wait a little longer for their Netto stores to be turned into Asdas, the process of converting 147 ex-Netto sites into Asda Supermarkets is continuing apace. Stores in Westerhope, Lemington and Gateshead are among those that have been transformed in the last couple of months.

Following on from my ‘undercover’ visits to ex-Netto UGO stores on Teesside and an ex-Netto Morrisons in Tamworth – all among the 47 stores that Asda had to divest for competition reasons – Asda invited me, and my camera, to check out one of the stores that it’s kept and converted over to its own fascia: the shop at Old Fold Road, a mile or so from the centre of Gateshead, which serves the recently built St James’ Village housing development as well as more established, working-class communities in the Felling and Sunderland Road areas of the town.

Asda Supermarket, Gateshead (8 Aug 2011)

The focus of this first blog post is the store’s transformation from Netto to Asda, looking mainly at the revamped shop’s layout, ranges, and look and feel.

As well as letting me look around, Asda also challenged me to carry out a full weekly shop in the store and to test the much publicised Asda Price Guarantee: the company’s pledge to be “10% cheaper on your comparable grocery shopping” compared to Tesco, Morrisons, Sainsbury’s or Waitrose. I’ll blog about my shopping trip – and reveal whether it was indeed cheaper – in a second post to follow soon.

Asda Supermarket, Gateshead (8 Aug 2011)

...and in its former guise as Netto (28 May 2010)

So, what is the store like? Externally, as you might expect, it’s little changed – just like the ex-Netto Morrisons and UGO stores that I visited before. In this case, the Netto signage has been replaced by the new ‘Asda Supermarket’ brand – signalling the store as a smaller-than-usual Asda – while the bright yellow window vinyls have been replaced by similar ones in pale yellowy-green.

The store also retains the slightly unwieldy separate entrance and exit lobbies that were so beloved of Netto stores, and that got me similarly confused in Eston.

Asda Supermarket, Gateshead (8 Aug 2011)

However, once you enter the store the extent of the interior transformation becomes clear. The entire shop was gutted and refitted in the impressively short two-and-a-half weeks betwen Netto closing and Asda opening, and it does now feel like an entirely new store.

Interior of Asda Supermarket, Gateshead (8 Aug 2011)

Configuring the space to accommodate the sheer increase in SKUs – from Netto’s 1,800 product lines to around 10,000 now – would always have made the shop look different. However, Asda’s investment in new shelving, floors, ceilings and wall finishes replaces the slightly dowdy Netto shopfit with a feel that is bright, clean and modern.

Interior of Asda Supermarket, Gateshead (8 Aug 2011)

Though the deep red walls bring to mind the latest Wilkinson storefit, they (and the matching signage) do work well in bringing some warmth and colour to what could otherwise have felt like a crisp but slightly sterile interior.

Red wall finish and signage, Asda Supermarket, Gateshead (8 Aug 2011)

Inside the store, the logical layout of the entrance area is evidently designed to assist shoppers who are just popping in for one or two items. Newspapers and bestselling magazines are on the left as you go in, followed by a ’Food to Go’ section featuring sandwiches, drinks and snacks.

Newspapers, Asda Supermarket, Gateshead (8 Aug 2011)

'Food to Go' section, Asda Supermarket, Gateshead (8 Aug 2011)

On the right are flowers, four self-service checkouts, three regular checkouts, and the kiosk beyond.

Checkouts, Asda Supermarket, Gateshead (8 Aug 2011)

Given the store’s compact size, the kiosk has to perform multiple functions, serving as the customer service desk as well as housing the usual cigarette display and National Lottery terminals. Crucially, it’s also the ‘Click and Collect’ point – a key part of Asda’s strategy to push its non-food offer and build multichannel traffic.

Less logically, spirits are also located at the kiosk – presumably for security as much as convenience purchasing – though their absence from the main wine and beer aisle does make it awkward to buy spirits as part of a full shop.

Kiosk, Asda Supermarket, Gateshead (8 Aug 2011)

Entering the main body of the shop, customers are faced with what seems to be a relatively compact fruit and veg section relative to the ex-Netto UGO and Morrisons stores that I visited.

Fruit and veg section, Asda Supermarket, Gateshead (8 Aug 2011)

However, the multi-tiered shelving units allow a deceptively wide range of fruit and veg products to be fitted into the space, as well as helping to create a colourful and eyecatching display.

Fruit and veg section, Asda Supermarket, Gateshead (8 Aug 2011)

In fruit and veg, as throughout the store, value messages are key – Asda, for obvious reasons, is clearly keen to reassure former Netto customers that the prices on everyday items haven’t suddenly gone up.

Fruit and veg section, Asda Supermarket, Gateshead (8 Aug 2011)

Perhaps trying to tap into the current success of single-price retailers like Poundland, banners and shelf-edge labels highlight items costing £1, while hanging arrow signs draw attention to specific offers or ‘SuperPrices’ more generally.

'SuperPrices' sign at Asda Supermarket, Gateshead (8 Aug 2011)

Apart from fruit and veg, the store’s other major focus of both fresh products and visual theatre is the instore bakery, with an adjacent hot chicken counter.

Instore bakery, Asda Supermarket, Gateshead (8 Aug 2011)

Instore bakery, Asda Supermarket, Gateshead (8 Aug 2011)

Wisely, the bakery is placed in a traditional back-corner location rather than near the entrance as it is in Tamworth’s ex-Netto Morrisons, ensuring that there’s plenty of room both to circulate and to admire the attractive display.

Instore bakery, Asda Supermarket, Gateshead (8 Aug 2011)

On the downside, the store does lack a meat and fish counter, like the one Morrisons has squeezed into the old Netto in Tamworth; for me personally, as a fresh fish fan, that would limit how often I’d use this particular store for my full weekly shop. To be fair, however, I’m not necessarily the core demographic that this particular shop is catering for, and I’m sure Asda has done its homework in tailoring the store’s offer towards the everyday needs of local shoppers.

Oils and bread aisle, Asda Supermarket, Gateshead (8 Aug 2011)

The heart of the store is its aisles of ambient products, and it’s here – in categories such as oils and bread – that the increase in both branded and own-label SKUs is really noticable.

The upcoming blog post about my Asda shop will talk in more detail about how far I was able to get all the items on my shopping list. Generally speaking, though, it’s hard not to be impressed by how much Asda has squeezed into the space, including quite a few categories that never used to be represented in Netto.

Magazines and greetings cards, Asda Supermarket, Gateshead (8 Aug 2011)

I spotted, for example, a pretty extensive display of magazines – complementing the newspapers and bestselling magazine titles by the door – as well as a decent range of reasonably priced greetings cards.

Babywear aisle, Asda Supermarket, Gateshead (8 Aug 2011)

The overall extent of the non-food range is also surprisingly broad given the store’s limited space. It includes stationery, babywear and underwear, as well as books and entertainment, though the latter two did have quite a lot of gaps at the time of my Monday morning visit.

Books aisle, Asda Supermarket, Gateshead (8 Aug 2011)

I was also interested to spot a display of non-food ‘SuperBuys’, featuring an eclectic range of luggage sets, scooters and toasters. The deals – and the deliberately ‘home-made’ look of the signage – are obviously a nod towards the store’s Netto heritage.

However, most of the featured items looked like the same Asda-branded products that you’d come across in a larger Asda store, meaning that the SuperBuys lacked some of the sheer randomness and element of fun that make the hard discounters’ non-food deals so popular.

Non-food 'SuperBuys', Asda Supermarket, Gateshead (8 Aug 2011)

Nearing the end of my circuit, the store conforms to supermarket layout norms by locating the frozen foods and alcohol furthest from the entrance. Unsurprisingly, the frozen section eschews Netto-style chest freezers in favour of upright ones – similar to those seen in Eldon Square’s Waitrose and other compact supermarkets – to ensure that the maximum number of products can be fitted within the space.

Frozen aisle, Asda Supermarket, Gateshead (8 Aug 2011)

Frozen aisle, Asda Supermarket, Gateshead (8 Aug 2011)

Though lacking the aforementioned spirits, the alcohol section is also impressive in its range, and compares favourably with the old Netto offer – including, I was pleased to see, a cabinet of chilled beers and wines. Selling drinks that people can consume straight away seems like an an obvious move, and more often than not the major grocers’ convenience stores do it. However, I’m always surprised at how many larger supermarkets don’t have a chilled drinks cabinet, including M&S – surely the ultimate impulse purchase grocer, and the place where you stock up on your way to dinner parties.

Beers and wines, Asda Supermarket, Gateshead (8 Aug 2011)

To put things in context, it’s worth flagging up that I’m not usually an Asda shopper, partly because the store nearest to me – at Metrocentre – is overwhelmingly huge, full of children, and a nightmare to drive to. When I do shop there, it’s more often than not to check out the George clothing or other non-food ranges rather than to do a full shop – for which I prefer to go to Waitrose or Morrisons. Asda might well be cheap – more of which in my next post, of course – but at the vast and busy Metrocentre store you do pay for it in increased stress levels.

Having said all that, it’s hard not to be impressed with the new Asda Supermarket at Old Fold Road. The transformation from Netto is remarkable, and Asda’s investment in the store – and, by extension, the local community – is admirable. The attractive store environment, improved ranges and lovely staff – including ex-Netto colleagues supplemented with new recruits – are all big pluses, as is not having to walk around a huge store to find everything that you want.

'Asda in your Community' display, Asda Supermarket, Gateshead (8 Aug 2011)

Living two-and-a-half miles away, it’s fair to say I probably wouldn’t go back to this particular store on a regular basis. However, if I lived in the area, I’d certainly have no qualms about using the store for either convenience purchases or the bulk of my weekly shop (though preferably on a weekday, when I took my photos, rather than the more hectic Saturday afternoon when I carried out my actual shop).

Interior of Asda Supermarket, Gateshead (8 Aug 2011)

Last week, Retail Week reported that Asda had seen sales uplifts of 50% in its converted Netto stores, and that there were now plans to open 250 more smaller Asda Supermarkets instead of the 100 that had been originally envisaged. It’s not hard to see why sales are buoyant, given the improvement in the shopping environment and offer; indeed, staff at Old Fold Road told me that while former Netto shoppers were still happily coming in, they were also seeing plenty of new people who had never set foot in the store while it was Netto.

In recent history, big supermarket takeovers – be it Somerfield buying Kwik Save, Morrisons snapping up Safeway, or the Co-op buying Somerfield – have rarely gone to plan, typically resulting in disgruntled customers and haemorrhaging of combined market share. However, if Asda can maintain the early momentum across its converted estate – keeping existing Netto shoppers happy while simultaneously attracting new customers from its rivals – this might finally be a retail takeover that delivers on its promise.

St Clare's Hospice shop, Jarrow (8 Aug 2011)

While Store Twenty One is about to take over the unoccupied part of South Shields’ former Woolies, the ex-Woolworths in Jarrow – already part-occupied by Store Twenty One – has gained a new tenant for its own vacant section.

As I reported back in November, Jarrow’s old Woolworths has been divided in two, with Store Twenty One taking the largest portion (4,112 sq ft) facing the Viking Centre’s bustling Bede Precinct. In turn, what used to be the back half of Woolies, facing the much quieter Grange Road, has been split into two further shops, totalling 3,175 sq ft. The right-hand unit, empty when I last visited (below), has now been taken over by a shop for the local St Clare’s Hospice, an independent charity that provides specialist palliative care to adults living south of the Tyne.

Grange Road frontage of former Woolworths, Jarrow (10 Nov 2010)

Monday was the first time I’d seen the unit without its shutters down, and I was pleased to see all the giveaway signs of it being an ex-Woolies, with the distinctive metal-framed shopfront and black granite stall riser. Store Twenty One, of course, has installed an entirely new shopfront on its part of the building (below), meaning that the unit’s past as a Woolworths is much less obvious from the Bede Precinct side.

Store Twenty One, Jarrow (24 Jul 2010)

Before - the former Woolworths, Jarrow (16 Dec 2009)

While the carved-up former Woolworths sites in South Shields and Jarrow inch towards full occupancy, the old Woolies in North Shields looks, sadly, to be back on the market. The well-stocked and useful MIS Wallcoverings & Textiles Superstore (formerly Cramlington Textiles) in Saville Street West, which I first visited at the end of 2009, continues to trade, but with a ‘for sale or to let’ sign above the ground-floor frontage.

MIS store (former Woolworths), North Shields (8 Aug 2011)

Marketed by local property consultants A T Retail, the particulars confirm that the 5,619 sq ft unit is being offered either for lease or for sale “with vacant possession”, though there’s currently no visible sign – other than the ‘for sale’ board – of the MIS store closing down.

Former Burton, North Shields (18 Jun 2010)

The building is both attractive and a good size, but I suspect its slightly off-centre location may be the biggest hurdle to finding a new occupant. The presence of a long-vacated and much-altered Burton’s building opposite suggests that Saville Street West was once much more of a retail thoroughfare than it is now – today, much of the street is occupied by charity shops, convenience stores and empty units, as well as a couple of disused pubs. With a bit of luck, Asda’s new store on the current Netto site in Saville Street, barely 100 metres away, might help to build footfall in the vicinity and stem the current decline.

Former Woolworths and Well Worth It, Wallsend (8 Aug 2011)

Along the river, another North Tyneside town that is looking forward to the conversion of its Netto into Asda is Wallsend. Unfortunately, the Hadrian Road supermarket is a little too far from the High Street to have much positive impact on the town’s main retail centre, but the prominent vacant Woolworths site – following a brief and unsuccessful incarnation as Well Worth It – is a potent symbol of Wallsend’s current travails, stemming at least in part from Morrisons’ failure to open its promised store on the acquired Co-op supermarket site.

Plaster Piece closing down, Wallsend (8 Aug 2011)

That has already left a big hole in the town’s Forum Shopping Centre for more than two years, which isn’t set to be filled until a planned redevelopment completes at the end of 2013. Visiting Wallsend on Monday, I spotted at least two more stores in ‘closing down’ mode, including the Plaster Piece fireplace showroom, next to the old Woolworths in Station Road, and a branch of the collapsed fashion and homewares retailer Ethel Austin (aka Life & Style).

Ethel Austin closing down, Wallsend (8 Aug 2011)

Wallsend has some decent and popular retailers, both independent and multiple, but it really could do with some new stores – such as the Store Twenty Ones and B&M Bargains of the world, as well as another reasonably priced food store – to give the town centre a much-needed boost of both morale and footfall.

The modern centre promised for 2013 looks good; the danger in the meantime, however, is that indie closures and further multiples collapsing will increasingly force Wallsend’s shoppers to look elsewhere.

Notice at Netto North Shields (8 Aug 2011)

I paid my first visit to an ex-Netto Asda Supermarket last weekend – more of which in the coming days – but meanwhile the process of converting 147 Netto sites by the end of November continues apace.

North Shields is one of the many Netto stores that’s been mentioned in the 60-plus-strong comments thread attached to one of my earliest posts about Asda’s acquisition of Netto, back in January. Passing by on Monday, I noticed that the store is now in the midst of a ‘Clearance Sale’, ahead of its closure as Netto on Saturday 20 August. After a two-and-a-half week makeover, it will then reopen, as an Asda Supermarket, on Wednesday 7 September.

Netto in North Shields (8 Aug 2011)

Back in June, the Chronicle newspaper ran an article under the headline “Supermarkets ‘are swamping North Shields’”, in response to one independent trader’s frustration over the growth of the big multiples in the area. While it’s true that North Shields has large Tesco and Morrisons stores on its outskirts, the town centre, to be fair, has been fairly poorly served to date.

Co-op in North Shields (8 Aug 2011)

Alongside Netto in Saville Street, the town’s main thoroughfare of Bedford Street plays host to branches of Heron Foods, Iceland and a decent-sized Co-op. However, many shoppers seeking a better balance of range, quality and value seem to head across the Tyne to South Shields’ Asda or Morrisons, judging by the carrier bags that I spot every time I use the Shields Ferry.

Morrisons, South Shields (30 Apr 2011)

Of all the Netto sites that Asda has acquired, North Shields’ has the advantage of occupying a modern building with dedicated parking, yet in a very central location right opposite the town’s Beacon Shopping Centre. If the store’s conversion to Asda encourages more people to stay in North Shields for their weekly shop then that’s certainly something to be welcomed.

Promotion for Tamworth's new Morrisons (17 Jun 2011)

With a visit to an ex-Netto UGO in the bag, and one to an ex-Netto Asda in the offing, it seemed only fair to check out an ex-Netto Morrisons while I was in Tamworth a couple of weeks ago.

As I explained when the news was announced back in January, Tamworth’s Netto is one of 16 initially divested by Asda to Morrisons, with another two – in Salford and Dunstable – added since. The Haldane Retail Group has acquired 20 sites, which it has now converted to its UGO fascia, while Iceland and the Co-op have each bought three. This means that of the 47 Netto sites that overlapped with existing Asda stores, only three remain to be sold in order for Asda to meet its obligations to the OFT.

New Morrisons, Tamworth (17 Jun 2011)

Former Netto, Tamworth, before conversion to Morrisons (4 Apr 2011)

Tamworth’s new Morrisons was built as a Kwik Save in the 1990s, briefly became a Somerfield, reverted back to a Kwik Save fascia, stood empty for a year, and then reopened as Netto less than three years ago. From the outside, the store is little changed from its previous incarnations, though the ‘Tasty Bread’ caption and imagery next to the entrance gives a flavour of what has changed inside. Meanwhile, prominent signs, banners and billboards ensure that the store is highly visible to passing motorists.

As you enter the shop, an instore bakery occupies the space immediately on the right. The location was presumably dictated by the building’s layout and compact size, but it did mean that there was some congestion as shoppers entering the store with trollies tried to get past customers browsing the bread and cakes. At the bottom of the store, there are also small but attractively presented meat and fish counters. So, not the full ‘Market Street’ offer, clearly, but a significant step up from what Netto used to offer in the same space.

There's no missing Tamworth's new Morrisons (17 Jun 2011)

Indeed, the major impression of this Morrisons store is just how much bigger it feels than when it was trading as Netto. It’s perhaps only half or two-thirds of the size of a typical converted Safeway, yet it’s clear that this is a shop where people can do – and are doing – a full weekly shop. The store was doing a decent business when I visited on a Friday lunchtime, with plenty of cars in the car park as well as shoppers arriving and departing on foot.

It’s the first time for a couple of decades – when Sainsbury’s left Ankerside to move out of town – that the Tamworth Co-op supermarket in Church Street has had any significant town centre competition, and it will be interesting to see where Morrisons steals its trade from: the in-town Co-op, Farmfoods or Iceland; the out-of-town Asda or Sainsbury’s; or the much larger, purpose-built Morrisons a couple of miles away in Wilnecote.

Paying for my goods at the till, I was pleased to see that the staff were all smiling, happy and talkative – always an encouraging sign. Indeed, I ended up having some banter with the guy at my till when he started to question whether I was old enough to buy the bottle of wine that was in my basket. This 37-year-old was quite content for the checkout guy to guess that I was 23 – young enough for me to feel flattered, but old enough to actually be allowed to buy the wine.

Overall then, my impressions of this compact Morrisons store were good. It was clean and well stocked, and shows that Morrisons can work effectively in a smaller than usual format. On the other hand, by not having all the instore features – most notably a full ‘Market Street’ – that normally make a Morrisons so distinctive, I couldn’t help feeling that the store lacked just a little of the usual Morrisons ‘personality’. As Morrisons rolls out more smaller stores – as well as its new M Local convenience format – perhaps it can do a bit more to make sure that these Morrisons really feel like a Morrisons.

Netto, Birtley (24 Jan 2011)

The Co-operative Group has announced today that it is to acquire the Netto store in Birtley, Gateshead – one of the six remaining sites that Asda is required to divest following its takeover of the Danish supermarket chain.

The OFT-approved deal is good news in that it secures the future of Birtley’s only supermarket, along with two more Netto sites in Whalley Range, Manchester and Stanton Hill, Nottinghamshire. It means that only three more Netto stores – in Wallasey, Keighley and Barrow-in-Furness – remain to be divested by Asda.

The Co-op has exchanged contracts on the newly acquired stores, which David Roberts, Director of Property for The Co-operative Food, has described as “a valuable addition to our portfolio and another important step in our expansion plans.” The sale is expected to be completed later this year, and the 42 staff employed across the three stores will then all transfer to The Co-operative Group. Until then, my assumption is that Asda will continue to trade the divestment stores under the Netto fascia, as required by the Office of Fair Trading.

Closed down Somerfield, Birtley (24 Jan 2011)

The deal also marks the Co-op’s return to Birtley after a two-year absence, when it traded – briefly – from the Somerfield site across the road. Occupied historically by Presto, Safeway and then Somerfield, the Co-op sold the store that it had acquired to Morrisons in April 2009, only for the Bradford-based chain to close it down. The site remains empty today, hence the especial interest in the fate of Birtley’s Netto, the town’s last supermarket standing.

Today’s news is a reminder of how the Co-op is continuing to grow its supermarket empire following its £1.565bn acquisition of Somerfield, back in March 2009. The Group currently has a 2,800-strong food store network, and intends to add another 300 outlets over the next three years, which will employ 7,000 people.

Recently opened Co-operative Food store in the Strand, London (6 Apr 2011)

50 store openings are planned for 2011 alone, with nine – including three in central London – opened to date. Edinburgh, Glasgow, Southampton, Liverpool, Manchester and Swansea are apparently among the locations that will see new Co-op stores before the end of the year.

The latest UK grocery market share data from Kantar, released this week, continues to show the Co-op firmly in fifth place, its 6.9% share well ahead of Waitrose’s 4.3% but some way behind Morrisons (12.0%) in fourth. However, the Co-op’s present-day share is still somewhat lower than the 7.7% share that the separate Co-op (4.4%) and Somerfield (3.3.%) businesses held at the time of the takeover.

While disposals to other retailers – as required by the OFT – obviously account for some of the drop, a report in Retail Week last year suggested that sales had “collapsed” at former Somerfield stores following acquisition. Data cited by Retail Week showed a 13.3% drop at unconverted stores in the month to April 2010, and a 14.1% decline at stores converted to the Co-op fascia. In contrast, trade at established Co-operative Food stores was up a healthy 1.6%, month on month.

The Co-op argued that lowering prices at Somerfield to match its own accounted for some of the decline; equally, there was always going to be some cannibalisation in creating such an extensive combined store estate. In addition, some consumers who liked Somerfield will no doubt have switched to other supermarkets rather than stay at the Co-op, though other Co-op-loving shoppers may, of course, have moved in the other direction. It’s a complex picture, and with the Somerfield fascia now all but disappeared from the market share data, it will at least be easier to keep track of the Co-op chain’s true performance relative to its peers.

Netto, Old Fold Road, Gateshead (28 May 2010)

Less than six months after the carve-up of the Netto estate was confirmed, the Danish supermarket fascia is well on its way to disappearing from the UK retail landscape.

Haldanes – currently distracted by the collapse of its eponymous chain – was the first to complete conversion of its 20 acquired stores, with all now trading as UGO. Meanwhile, Iceland and Morrisons are in the midst of revamping the Netto sites that they acquired, with some stores – such as the new Morrisons in Tamworth, which I hope to visit later this week – already trading.

Former Netto, Tamworth, before conversion to Morrisons (4 Apr 2011)

Asda itself, of course, has the biggest job, with 147 ex-Netto stores set to be switched over to its new Asda Supermarkets fascia. The first conversions – including Stainforth, below – opened last month, and I’m told by Asda’s PR people that the rest will be finished by November – an impressive rate of more than five conversions a week.

Here on Tyneside, three stores – in Westerhope (Stamfordham Road), Lemington (Northumberland Road) and Gateshead (Old Fold Road) – closed their doors as Netto last Saturday (11 June), and are each set to reopen as Asda Supermarkets on Monday 27 and Tuesday 28 June following a £500,000 refit. For stats buffs, that’s around five times the reported cost of converting a Netto to a UGO.

Early conversion of an ex-Netto in Stainforth, South Yorkshire

However, where Haldanes’ UGO stores are very much an adaptation of the existing Netto fitout, Asda’s revamps are more extensive, involving stripping the stores back to their shell.

In terms of what the converted stores will offer the customer, Asda’s PR – like UGO’s – flags up the key themes of low prices, improved ranging and greater convenience.

On price, Asda’s main headline is that “all newly converted Netto stores will charge the same low price as every other Asda in the UK” – a simple, effective and powerful message that is likely to resonate with shoppers. It should also avoid scaring off loyal Netto customers with prices that are too high, a potential problem that fellow blogger Steve Dresser and Soult’s Retail View readers have highlighted in relation to UGO.

UGO (former Netto) store, Hartlepool (4 May 2011)

On range, Asda again echoes UGO in pledging that customers will be able to “complete a full weekly shop”, with each of the new stores featuring the the full breadth of Asda’s own-label food ranges, including Smart Price, Chosen By You, Extra Special, Good For You, Free From and Organics. However, the increase in product lines (SKUs) from 1,800 to 10,000 rather puts UGO’s 3,000 (or even the now-defunct Haldanes’ 7,000) in the shade.

Finally, in terms of convenience, Asda Supermarkets’ longer opening hours, extra services (PayPoint, National Lottery, cash machines), and the provision of a collection service for online orders should all go some way to increasing footfall and basket size from Netto levels.

Former Somerfield, Adelaide Centre, Benwell (28 May 2010)

Before the new Tyneside Asda stores open in a couple of weeks’ time, I should probably try and check out the recently opened Asda Supermarket in Benwell’s Adelaide Centre. This store opened on 19 May, but is a former Somerfield site rather than an ex-Netto.

Given this acquisition, I was curious about the implications for the Netto at Mill Lane, less than a mile away, which is among the 147 stores that Asda is supposed to be keeping. Tucked down a side street and housed in a corrugated shed, this is hardly the most glamorous of Netto sites, yet it provides an important service to a community that otherwise lacks much in the way of affordable grocery store provision.

I’m assured, however, that the Mill Lane Netto will still be converted to an Asda Supermarket in the coming months, though as yet there’s no confirmed date for when that changeover will take place. I will, naturally, give an update as soon as I receive further news.

In the meantime, do feel free to share your experiences of visiting any newly opened Asda Supermarkets. Whether you’re an ex-Netto shopper or someone who’s been attracted from elsewhere, I – and your fellow Soult’s Retail View readers – will be keen to hear your reactions.

Former Safeway, Byker (6 Jun 2011)

It’s amazing how a throwaway remark can prompt an entire discussion on something unexpected…

In my January post about the divvying up of Netto’s North East store estate following the chain’s acquisition by Asda, I made passing reference to Birtley’s former Safeway – a store which Morrisons sold to Somerfield in 2004, bought back in 2009, but has then failed to reopen, leaving Netto as the town’s only supermarket.

My observation subsequently encouraged a whole thread of comments on the fate of former Safeways, highlighting a surprisingly large number of stores that Morrisons initially disposed of but has since reacquired following the Co-op’s takeover of Somerfield – a reflection of Morrisons’ new-found readiness to run more compact supermarkets than had traditionally been the case.

While a fair few ex-Safeways have therefore changed hands as many as three times in the last eight years, the former store in Raby Street, Byker – which I passed by a couple of days ago – is one whose retail use ended with Morrisons’ takeover.

Morrisons, Byker (6 Jun 2011)

With Morrisons having opened a large superstore in Shields Road in 2002, it was always inevitable that the nearby Safeway would be on the OFT’s list of stores – 52 in total – that Morrisons was required to divest. While other Newcastle and North East stores were promptly acquired by other grocers – Heaton and Team Valley by Sainsbury’s, for example – no offers were forthcoming for the Byker Safeway, despite its location close to the Byker Metro station and a parade of smaller shops.

Former Safeway, Byker, with parade of shops opposite (6 Jun 2011)

In December 2004, the OFT reported that:

Morrisons has sought bids for the Byker store. However, to date, no suitable bids have been received, whether from grocery operators or non-grocery operators and whether above open market value or not. Having consulted with Morrisons, the OFT is minded to direct that Morrisons may retain the store at Raby St, Byker…

With Morrisons clearly having no interest in operating a second branch so close to its first, the store – once famous for selling fewer sprouts than any other UK Safeway store – was duly closed.

The property remained empty, I believe, until 2007, when it was bought for £2m – not by another retailer, but by the expanding North East business Winn Solicitors, a company specialising in accident compensation, personal injury claims, and irritatingly catchy local radio jingles.

Rear of former Safeway, Byker (6 Jun 2011)

As you might expect, the property appears to have had some extra windows punched in, to make it suitable for office use, but it still looks for all the world like an abandoned Safeway – complete with clock tower, loading bay, distinctive green paintwork, and a space where the trolleys ought to be.

Side of former Safeway, Byker (6 Jun 2011)

Of course, with Asda set to open a new full-line store in the former Woolworths at Newcastle Shopping Park, Byker residents’ food shopping habits are set to evolve yet again in the coming months.

Morrisons’ arrival on Shields Road, nearly a decade ago, gave a much-needed fillip to a shopping centre that was, arguably, then underserved by its relatively compact, and expensive, Safeway store. It remains to be seen, however, how far the new Asda – with its easy access and edge-of-centre location – will undo those gains.

Ruby Wax and Andy Bond at the Retail London Conference

Greetings to you not from my usual North East, but from my hotel room in London, where I’m reflecting on an intense but inspiring afternoon at the inaugural Retail London conference. I hope to post fuller reflections on the event following tomorrow’s second day, but I’ll try to keep my tiredness at bay while I give some initial reactions.

Today’s sessions brought together a varied and eyecatching line-up of speakers, with comedian Ruby Wax – an inspired signing – in the role of moderator. In the context of an event that is otherwise very slick and streamlined, Ruby’s unscripted repartee with the speakers – and unsurprising lack of retail industry knowledge – brings a welcome light touch to proceedings.

Retail London branding

The event opened with a passionate and note-free speech from former Asda chairman and chief executive Andy Bond, jokingly introduced by Ruby Wax as “nobody now”, following the end of his 16-year-stint at the Walmart-owned retailer. Unsurprisingly, current economic challenges were a recurring context in this and subsequent speeches, with Bond arguing that UK retail is in for “a tough time” this year and next, and that the “retail recession is ahead of us” rather than behind.

However, he sought to offer a practical perspective on how retailers can rise to those challenges, highlighting the three imperatives of, firstly, delivering what (increasingly empowered) customers want; secondly, building a competitive business model through employing great people, building a business based on purpose and integrity, and being passionate about product; and, thirdly, driving ones own personal development.

It was on the third point where Bond was perhaps most persuasive, emphasising the importance of “following your passion not your wallet” and drawing from his own love of cycling to highlight the value of balancing work with “other things you’re going to do in your life.” Later, philosopher and writer Alain de Botton used his eloquent speech on the philosophy of the global modern consumer to endorse similar values of integrity, honesty and “fitting with who we are”, in the context of work being one of the pillars – along with love – upon which modern expectations of happiness are based.

Glen T Senk at the Retail London Conference

Following up Andy Bond, Bob Thacker from US chain OfficeMax gave an entertaining and insightful account of how a retailer that’s not a market leader can build its brand and a niche by having “big ideas” rather than “big bucks”. Passion, creativity and curiosity in marketing are, he argued, especially important in the context of a world where “people are paralysed” and have ”hit the pause button” on retail spending. Later in the afternoon, fellow American Glen T Senk, the CEO of Urban Outfitters, gave an equally rich and interesting account of how the company has built a distinctive and “emotional” brand, underpinned by the principle of “wowing the customer” in order to “build the business for the long term.”

On an afternoon dominated by inspirational stories and themes, the speech by Deloitte economist Ira Kalish on the changing shape of the global economy was the only incongruous note. While Kalish came across as clearly very knowledgable on the world’s emerging markets, the presentation suffered from its surfeit of information over inspiration, and its lecture-style seemed to go down less well with the audience than the more engaging feel of the other speakers.

So, what can we draw from the first day of the conference? For me, two key threads have emerged.

One relates to the unavoidable economic reality in which we find ourselves, and the recognition that things may yet get worse in retail before they get better.

The second thread, however, is a more optimistic and celebratory one. It reminds us of all those qualities that shape, and have shaped, the most successful retail businesses and leaders – among them passion, integrity, honesty and creativity. Today’s speakers left the audience in little doubt that retailers who subscribe to these values will be best placed to weather the present economic storm. 

Netto, Birtley (24 Jan 2011)

When Asda’s sale of 39 surplus Netto stores was announced a couple of weeks ago, I noted that Birtley – a small town close to here, within the Borough of Gateshead – was home to one of the eight remaining Netto stores that Asda is still required to divest by the OFT.

As I explained then, the closure of the town’s nearby Somerfield store following its purchase by Morrisons in 2009 – and Morrisons’ failure to then reopen it – has left its 11,000 strong population unusually reliant on a single discount supermarket. What happens to Birtley’s Netto is therefore of considerable importance to the people who still use the Durham Road area for their local shopping.

Durham Road shops, Birtley (24 Jan 2011)

Given that independent grocer Haldanes has bought more than half of the divested Netto stores to date, I took the opportunity, while meeting the firm’s bosses, to quiz Chief Operating Officer Richard Collins on whether Haldanes had any interest in the Birtley store.

Netto, Birtley (24 Jan 2011)

He confirmed that Haldanes had visited the shop, and that he considered it to be a “great store” with good parking. Pressed further, he said that Haldanes had no specific plans to acquire additional stores from the OFT’s divestment list, but refused to rule out making a future bid for the Birtley store.

Birtley Netto’s problem is that many of the potential purchasers would seem to be ruled out due to the proximity of their existing shops. Clearly Asda isn’t in the picture, given that it has to divest the store in the first place, while Morrisons – which still owns (and is trying to dispose of) the vacant Somerfield site opposite – is unlikely to be interested.

Tesco, Chester-le-Street (24 Jan 2011)

Meanwhile, Sainsbury’s has a superstore three miles away at Team Valley, and Tesco and Iceland (and Morrisons) have shops at Chester-le-Street, the same distance away in the opposite direction. This only really leaves other discounters – Lidl, Aldi or Haldanes’ new UGO venture – in the frame. However, with a larger supermarket development still possible on the Somerfield site in the future, a hard discounter is, in any case, more likely to be able to compete with whatever new store might open on that site.

Closed down Somerfield, Birtley (24 Jan 2011)

Given the positive feedback from Haldanes, it seems that if the shoppers of Birtley fancy their Netto becoming a UGO, then it’s in their hands to do something about it.

Haldanes’ bosses are reading this blog, so feel free to share your thoughts below, or drop Haldanes a line directly. Who knows, perhaps Soult’s Retail View can harness local people power to help attract an expanding retailer to Gateshead?

UGO cake

Following my recent post about Asda’s divestment of 39 surplus Netto stores, I had the pleasure of being invited to my first press conference last Friday, in Leeds. 

Appropriately held just a short distance from Asda’s corporate HQ, the event was organised by Haldanes, the fledgling independent grocer who, as I blogged before, is acquiring 20 mid-size Netto supermarkets – including four in the North East – that it plans to relaunch under a new discount fascia, UGO (pronounced You-Go, like the 1980s car brand). 

The press conference was a great opportunity to find out more about Haldanes’ intentions for the fledgling UGO chain and the eponymous Haldanes fascia, as well as a chance to meet some of the company’s key people – including Arthur Harris (Chief Executive Officer), Richard Collins (Chief Operating Officer) and Adam Hart (the recently appointed Non-Executive Chairman). 

So, what can we look forward to as Haldanes takes its next steps towards becoming, in its own words, “a viable alternative to the major multiples”?

Certainly, when I coined the phrase “son of Netto” to describe UGO, I hadn’t quite banked upon the chain’s visual identity being so derivative of what it’s replacing. Scottie may have been banished, but the yellow and black colour scheme, bold font and (modernised) basket device are all present and correct.

UGO logo

Netto logo

Haldanes’ argument is that by capitalising on what it sees as the “distinctive and trusted” yellow and black Netto fascia, the UGO brand will provide “reassurance” and a “seamless transfer” for customers. Indeed, COO Richard Collins told me that Netto had been “very supportive” during the process of developing the UGO visual identity, and that the Danish retailer had been “surprised but flattered” by the obvious similarities with its own brand. Of course, given that Netto is exiting the UK entirely, there will be no scope for confusion between the two chains – unless UGO decides to enter the Danish market at some point in the future.

Throughout the press briefing, one thing that came across strongly was Haldanes’ respect for the Netto business and what it has achieved in the UK to date, with Richard Collins praising the “loyal staff and customers”, and emphasising Haldanes’ “excitement” over the portfolio of stores that it is acquiring. Certainly, it’s worth noting that Netto’s British operation has been consistently profitable over the last decade (making an operating profit of £7.6m in 2009), even if its operating margin (of around 1%, compared to Asda or Morrisons’ typical 4 to 5%) has been a little on on the low side.

Mock-up UGO leaflets

This sense of not messing too much with the Netto formula comes through not only in UGO’s brand identity, but also in terms of what the rebranded stores will be like as places to shop, and the marketing channels that will be used. Hence, Haldanes has no intention of increasing prices, plans to keep Netto’s popular non-food and ‘spot line’ deals, and intends to maintain a strong fresh food offer – something the retailer sees as a current strength of Netto compared to the other hard discounters. The regular offer flyers delivered to nearby homes are also set to be retained.

At the same time, Haldanes’ bosses seem to have recognised that there is scope to increase footfall, sales densities and profits by tackling those areas where the Netto business model can be enhanced – what Richard Collins referred to as “putting the icing on the Netto cake.”

The checklist of planned improvements seems logical and well informed. Some involve making it easier for customers to carry out a full weekly shop: for example, by doubling the core range of branded traditional grocery lines to around 3,000 SKUs (compared to about 7,000 in a typical Haldanes); introducing an enhanced range of health and beauty products; and offering a full range of newspapers and magazines.

Other changes are intended to address barriers that might currently put shoppers off going to Netto, such as installing ATMs at all stores, accepting credit cards, offering home delivery, and investing heavily in customer service. The scope for offering additional services, such as BrightHouse-style consumer credit, is also being explored.

Example of proposed UGO marketing

Marketing activity – led by the Darlington-based agency Charles Hollywood – is also set to be beefed up, including a campaign featuring the famous strongman Geoff Capes (“due to the strength of the UGO deals”), a rugby league sponsorship deal, and seemingly infinite scope for UGO-related messaging puns.

Against the backdrop and excitement of the UGO launch, the lack of any new Haldanes-branded stores since early 2010 has understandably raised questions among commentators about the future of the eponymous fascia, particularly following the news that one existing Haldanes store (in Biddulph) will shortly be converted to the UGO brand.

However, CEO Arthur Harris was clear that the company’s long-term strategy is based around running three separate and “very important” fascias – UGO, with its discount offer; Haldanes, seen as a market town mid-size supermarket format; and a new convenience and forecourt chain, Haldanes Xpress.

Artist's impression of Hartlepool UGO store

The Biddulph shop, he explained, is a location where a large Sainsbury’s has recently opened nearby, and where the company sees a UGO store as being able to compete more effectively than a Haldanes. He also pointed out that the conversion will allow the full UGO fitout to be trialled before it is rolled out to the acquired Netto stores – a process that is expected to involve stores being shut for only 14 trading hours, and will see all 20 shops transformed over a six-week period between mid-March and the end of April.

Harris refused to be drawn on how much Haldanes had paid for the 20 stores, but revealed that the cost of refurbishing and converting them to the UGO brand would be around £2m in total.

Haldanes logo

Following the company’s recent purchase of a petrol forecourt in Scotland, and of a post office and convenience store next to the existing Haldanes shop in Tattershall, Lincolnshire, Harris also confirmed that the firm is in advanced discussions to purchase eight convenience stores that will be rebranded under the Haldanes Xpress fascia. An announcement on this acquisition is apparently expected within the next two to three weeks.

Additionally, the business is already looking at picking up a couple more stores for UGO in Leeds – not, it would seem, among the eight Netto stores that Asda still needs to divest. However, Haldanes hasn’t ruled out acquiring one or two more stores from the OFT disposals list in the coming months.

For the moment, indeed, it seems that the Haldane Group is set to continue growing by acquisition. In response to my question, Arthur Harris said that there were no immediate plans for any new-build stores, but that it was certainly something the business would hope to achieve in the future. As the business expands, he revealed that private label products, a groupwide loyalty card and a dedicated supply chain are all likely to be on the cards. For now, however, the company’s focus would understandably be on “bedding down what we’ve got.”

Closed down Kwik Save store

Given the painful and drawn-out demise of the last big British food discounter – Kwik Save – many of whose stores were in comparable locations to UGO’s, you could be forgiven for questioning the wisdom of Haldanes’ move into a similar market. Towards the end, however, Kwik Save’s flaws typically included dowdy stores, unremarkable customer service and prices that weren’t actually all that cheap – all pitfalls that the UGO team seems to recognise, and be keen to avoid.

Rather, a better comparison is probably with those family discount chains, such as Heron Foods and Farmfoods, that have grown up somewhat below the radar into successful and profitable grocery businesses. Up against stiff competition on several fronts – the big four supermarkets, Iceland, and the hard discounters – both have become successful through a steady process of store openings and acquisitions, and by giving customers want they want: keen prices, decent quality products, and clean, bright stores in convenient locations.

If UGO is able to mesh these same qualities with what promises to be its own distinctive – and hopefully profitable – take on the discounter format, there’s every reason to think that the concept will be a success. As long as it avoids the Kwik Save recipe’s sticky mess, UGO might indeed end up being the very tasty icing on Netto’s partly-baked cake.

Netto store in Gateshead

As I blogged earlier, Asda’s acquisition of Netto’s UK business moved a step closer yesterday, with the news that it has reached agreement to sell most of those Netto stores that overlap with existing Asda sites.

Back in May, when Dansk Supermarked A/S agreed to sell its 194 UK Netto stores to Asda for £778m, it was widely expected that the Office of Fair Trading (OFT) would require Asda to divest some of that portfolio, in order to avoid a lessening of local competition in areas where Asda and Netto are currently both represented.

Asda store

This was confirmed in September, when the OFT announced that it had reached agreement with Asda to divest 47 stores where there were local competition concerns. Of these, the OFT was concerned that some stores may not be of interest to other eligible food retailers, so required Asda to find suitable upfront buyers for those shops before it would allow the remaining store purchases to proceed. At the time, however, “reasons of confidentiality” meant that the identity of the 47 stores to be divested was not revealed; similarly, the number or locations of stores requiring upfront purchasers were not made public either.

Now, yesterday’s various announcements from the parties concerned reveal that Asda has secured buyers for 39 of the 47 divestment stores – including all 25 of those on the upfront list – in the shape of Morrisons, Iceland and the independent grocer Haldanes.

Morrisons – 16 stores

Morrisons store

Morrisons is snapping up 16 of the 39 stores – including 6 from the upfront list – for £28.1m, adding 120,000 sq ft of space to its expanding small-store estate. The handover of stores is expected to take place on a phased basis starting in March, with all the shops expected to be converted to the Morrisons format over the following three months.

Several of these stores – in Castletown (Sunderland), Bedlington and Shildon – are in the North East, while others are in Telford, Tamworth, Rugby, West Bromwich, Oldbury, Boston, Newton-le-Willows, Breightmet (Bolton), Accrington, Castleford, Ravensthorpe (Dewsbury), Armthorpe (Doncaster) and Bransholme (Hull).

Haldanes – 20 stores

Haldanes store

The independent Grantham-based grocer Haldanes is taking a tranche of 20 stores – all but two from the OFT’s upfront list of 25 stores – including North East sites in Ashington, Eston, Hartlepool and Stanley. The other sites to be taken over by Haldanes include Athersley (Barnsley), Blackburn, Boothferry, Bradford, Carcroft (Doncaster), Hull (two stores), Kirkby, Liverpool, Lundwood (Barnsley), Monk Bretton (Barnsley), Nuneaton, Retford and Rotherham, all from the upfront list, plus one each in Bury and Burnley.

Only last week, I remarked that Haldanes’ expansion seemed to have stalled, after an initial period of rapid and spectacular growth. Only launched as a company [broken link removed] in October 2009, the business built up its present portfolio of 23 former Somerfield or Co-op stores over a dizzying two-month period, but there had been no new supermarket acquisitions since January last year [broken link removed]. Indeed, the swift closure of acquired stores in Pontefract and Dunbar, the failure to open the shop it bought in Pwllheli, and reported trading difficulties had all raised question marks over the business’s ability to compete in the UK’s cutthroat supermarket sector.

However, after a quiet few months, this latest acquisition suggests that Haldanes is back on track – good news given that the recent history of the UK grocery sector has tended to involve smaller retailers disappearing through acquisition or collapse, rather than new competitors entering the market and keeping the established players on their toes.

Interestingly, the OFT notes that Haldanes plans to convert the acquired stores to a new discount brand, UGO, which will reportedly “build on the discount retailing strengths of Netto but will also have stronger and broader core grocery range together with a much wider health and beauty offer.” Given that many of the stores on the OFT’s upfront list are, by definition, in less glamorous locations, Haldanes’ move seems like the right approach, and should avoid a repeat of when Somerfield scared away Kwik Save shoppers by converting stores to its eponymous – and more expensive – fascia.

Iceland – 3 stores

Iceland store

Iceland’s package of three stores includes just one from the upfront list, in Platt Bridge, Wigan. Iceland’s marketing department tells me that the two others are in Spennymoor, up here in County Durham, and at Lane Top in Sheffield.

What it all means

Netto in North Shields

So, what does all this mean for the UK’s grocery sector, and for the consumers who shop at those stores?

What’s clear is that the Netto brand will have vanished from the UK by the end of this year, though it will remain elsewhere in Europe – Dansk Supermarked is only selling its British stores, not those in Denmark, Germany or Poland. The 147 Netto stores that Asda is keeping are set to be rebranded as ‘Asda Supermarket’, while Morrisons, Haldanes (UGO) and Iceland will all convert their acquired stores to their own fascias.

Existing Asda in Seaham

Shoppers will no doubt welcome the news that Asda’s converted Nettos will charge the same prices as all existing Asdas, and will feature an average range of 10,000 products – up from Netto’s 1,800. However, some of those who currently use Netto on a regular basis will surely feel some sadness at the loss of its distinctive shopping experience and eyecatching offers.

As noted above, Haldanes’ new UGO stores look likely to be the closest thing to a ‘son of Netto’, presumably combining the best facets of Netto with Haldanes’ own experience of running compact supermarkets over the past year or so.

Given the strong North East presence, it will be fascinating to see what the UGO stores look like, and how they fare. While operating multiple fascias can be a really successful way of targeting different market segments – not just in the grocery sector – it can be a disaster if the execution is poor or the differentiation unclear.

Haldanes store

Indeed, Haldanes tells me that the company is about to launch a third fascia – Haldanes Xpress – which will be applied to a newly acquired petrol forecourt, a convenience store with a post office, and a further eight convenience stores that Haldanes is in “advanced discussions” to buy.

For Iceland, the three new stores represent a modest acquisition for a company that has snapped up well over 50 old Woolworths sites during the past two years, and perhaps suggests that, having reached nearly 800 shops, the number of suitable new sites for Iceland stores is starting to slow.

For Morrisons, however, its purchase signals a determination to make further inroads into the lucrative small supermarket and convenience space. It’s easy to forget that only six years ago, Morrisons had little interest in smaller stores, selling a package of 114 Safeway Compact stores to Somerfield for £260m. Ironically, Co-op’s takeover of Somerfield meant that many of those former Safeways were later resold where they overlapped with existing Co-op sites. In some locations – such as Birtley in Gateshead – Morrisons actually bought back sites that it had disposed of only a few years earlier.

Sainsburys Local store

Nevertheless, with Sainsbury’s and Tesco having already built up their successful small-store estates over many years, and Asda acquiring a strong presence in one fell swoop through its Netto acquisition, Morrisons has a fair bit of catching up to do.

Back in November, there were highly unlikely rumours – seemingly without foundation – about Morrisons planning a takeover bid for the upmarket online grocer Ocado. While Morrisons may be wary of any more major acquisitions after the problems it had digesting Safeway, I would have thought that snapping up a smaller competitor – as Asda has done with Netto – would be a more likely takeover scenario.

A few moments ago I mentioned the former Safeway and Somerfield store in Birtley, in Tyne and Wear, which Morrisons took over in 2009. Unfortunately, Morrisons then decided that it had no use for the site, which has remained vacant ever since and is now being marketed as part of a larger potential development site.

Asda at Washington Galleries

This development has left Netto as Birtley town centre’s only supermarket. However, this store, in turn, is one the eight remaining Netto stores that the OFT is requiring Asda to dispose of, presumably due to the proximity of the huge Asda store – the old Woolco – at Washington Galleries.

Just like in Wallsend – where another store acquired by Morrisons has never opened – Birtley has undoubtedly and understandably suffered from the unexpected closure of its main supermarket. Hopefully a purchaser for the Netto store will be announced soon – after the disappointment and uncertainty of the last couple of years, Birtley surely deserves a food retailer that will invest in the town, and give the locals reassurance that they’ll still have somewhere to shop.

Morrisons store

The Netto store in my old hometown of Tamworth is one of 16 sites that Morrisons is set to acquire following Asda’s purchase of the Netto UK business. The stores are among 47 that the Office of Fair Trading (OFT) has required Asda to sell to competitors, to avoid a lessening of consumer choice in those areas where Asda and Netto currently compete with one another.

With Asda already having a vast store at the nearby Ventura Retail Park, it was always likely that Tamworth’s Netto would be one of those that it would have to dispose of. However, with Sainsbury’s, Aldi, M&S, Iceland, Farmfoods and Tamworth Co-op also all currently represented in either the town centre or at Ventura, there was a fairly limited pool of potential purchasers.

Morrisons already has a Tamworth superstore in Marlborough Way, Wilnecote – a couple of miles from the centre of town – but its purchase of the Netto site should give a boost to the town centre’s retail offer by providing a much wider range of goods than Netto currently offers.

Gungate Precinct with Kwik Save store in the early 1990s

The purchase by Morrisons is the latest development in a fairly turbulent history for the Upper Gungate supermarket site, which was originally built as a Kwik Save in the 1990s. For a time, it was open concurrently with the previous, smaller Kwik Save in the Gungate Precinct – a unit that had housed Tesco and Victor Value back in the ’70s and ’80s. However, that Kwik Save store eventually closed, and was occupied by Pound Plus until the precinct’s demolition last year.

Following Somerfield’s disastrous 1998 purchase of Kwik Save, the Upper Gungate Kwik Save briefly became a Somerfield, before being turned back into a Kwik Save again. The store then closed down following Kwik Save’s collapse in 2007, standing empty for a year before being reopened as a Netto in August 2008.

Assuming that Asda’s acquisition of Netto receives final approval by the OFT, the handover of Morrisons’ stores is expected to commence on a phased basis in March, with conversion to the Morrisons format taking three months. On this basis, Morrisons should be trading from the site sometime in summer 2011.

Given Morrisons’ retail pedigree, there’s every chance that the store’s latest incarnation will be more long-lived than its increasingly fleeting predecessors.

New Poundland store, Gateshead (21 Sep 2010)

Returning home after a two-week holiday in Montenegro (more of which in due course), it seems like quite a lot has been happening within Tyneside’s retail scene while I’ve been away. 

As well as Asda’s plans for the old Byker Woolies getting the green light, and Northumberland Street seeing “exploratory digging” ahead of gaining 100 security bollards, there’s a slew of five new store openings taking place in Newcastle, Gateshead and MetroCentre yesterday, today and tomorrow – some of them known for a while, but others a little more unexpected. However, though varying in scale and relative importance, all these new arrivals are interesting in their own way, and represent positive news for their respective locations. 

TK Maxx site at MetroCentre, back in March

Yesterday (Thursday) saw the long-awaited opening of the combined TK Maxx and HomeSense at MetroCentre – previously blogged about here – which occupies a 45,000 sq ft unit on the site of the old Odeon cinema. I’m yet to pay a visit, but an investment of this scale should provide a shot in the arm for what has previously been a very tired-looking Blue Mall, despite all the pedestrian traffic that passes through on its way from the nearby Transport Interchange. 

Also yesterday, Gateshead town centre had the unusual attraction of a store opening of its own, with Poundland setting up shop in the former Woolworths. Though there were some rumours about Poundland’s imminent arrival in the last month or two, the speed with the new High Street store has been opened is pretty impressive, with no sign of anything happening on site in the week or two preceding my holiday. 

Again, it’s a great boost for a site that had previously seemed destined for long-term vacancy, and can only have been helped by the start of demolition work on the nearby Get Carter car park – a tangible sign, at last, that Gateshead town centre is moving forward. Poundland’s decision to get in now seems like a canny move, as the location is bound to benefit massively, in the longer term, from the Trinity Square redevelopment. Prior to that, the store is also, as I noted before, opposite the planned temporary Tesco that will trade once the existing supermarket is demolished. 

The new Clinton Cards site in Eldon Square, photographed last month (6 Aug 2010)

Today, Newcastle’s Eldon Square has also had a couple of notable openings, including the new combined Clinton Cards and Pure Party in Douglas Way’s old River Island unit – mentioned previously here – and yet another new Starbucks, this time in St Andrew’s Way. Visiting Eldon Square a few days ago, I noticed that the existing Clintons has indeed closed, leaving a decent-sized vacant unit in Blackettbridge. Meanwhile, the new Starbucks sits next to Debenhams, occupying the previously empty large space between the department store and the lifts. All of a sudden, the layout of that part of the mall begins to make a lot more sense.

Existing Kurt Geiger in Grainger Street, Newcastle

Given Eldon Square’s current form, the old Clinton’s is unlikely to be empty for very long. One store it won’t be housing, however, is Kurt Geiger, with work already underway on creating a flagship store for the shoe retailer within the recently closed Barratts unit in Hotspur Way. Assuming that Kurt Geiger moves from its existing location in Grainger Street, this will begin the process of freeing up the ground floor space needed for the reported three-storey Urban Outfitters store within the current Green Market building.

Existing Apple Store, Eldon Square (16 Feb 2010). Photograph by Peter (aka 'Newcastle Historian')

Of all this weekend’s openings though, the most notable has to be that of the new Apple Store at MetroCentre. Though the store’s impending arrival is no surprise, having been known since May, its opening date has been kept something of a surprise. Indeed, the Chronicle only revealed the news three days ago, ahead of the store’s opening at 10am tomorrow (Saturday). Unsurprisingly, the store is located in the Debenham’s-anchored Red Mall – the most modern and attractive part of MetroCentre – occupying the unit that housed USC prior to that retailer’s recent relocation.

As the Chronicle rightly observes, it’s a real coup for MetroCentre  – and for Capital Shopping Centres – to have signed up Apple for a second Tyneside shop when there are still fewer than 30 Apple Stores in the UK, including some notable locations, such as Edinburgh and Leeds, where the retailer is not yet represented at all.

Other than here, only Bristol, Manchester and London feature Apple Stores simultaneously in both city centre and out-of-town locations – a sign, one must imagine, that the Eldon Square shop is already surpassing Apple’s expectations, and a great signal to other retailers that Tyneside retail is in pretty fine fettle right now.

Former Woolworths (now Heron Foods), New Washington (Concord) (17 Jun 2010)

Back in February, I blogged about the former Woolworths store in Sunderland’s Fawcett Street, which closed in 2004 following its acquisition by Primark.

At the time, I noted the curious lack of Woolies stores left on Wearside at the point of the retailer’s 2008 administration, with Houghton-le-Spring (#448) the last one remaining in the Sunderland area. As I’ve dug around more, however, it’s become clear that there are even more old Woolies on Wearside than I thought, with long-closed stores at New Washington (#1014), Seaham and Pennywell (#817), as well as the fairly short-lived Woolco (#2007) at Washington Galleries.

I’m imagining that the former Pennywell store is no more – perhaps demolished as part of the redevelopment of the estate’s shopping centre? – but I’d be curious to know when the store closed, where it was, and any memories of shopping or working there. I’ve got the store number – #817 – from an old edition of The New Bond, which would suggest that it opened in 1953.

Over to New Washington though, and I was alerted to the existence of that store by a photo, from 1959, on the Woolies nostalgia site, 100thBirthday.co.uk, which I found when hunting out information on Washington’s Woolco. According to the site, the New Washington store was a fairly late addition to the Woolies estate, opening as a self-service store in March 1959 in the then-new Arndale Centre. Apparently, however, business suffered once the enormous Washington Galleries Woolco opened down the road in 1970, eventually leading to the store’s closure in 1984.

'Arndale House' signage at Concord's Arndale Centre (17 Jun 2010)

It’s conceivable that the New Washington shop may have survived if it had only hung around a little longer, given that the Woolco estate was itself disposed of shortly afterwards – 100thBirthday.co.uk says 1985, Richard Hawkins 1986 and the Sunderland Echo 1988.^{[broken link removed]} Perhaps someone can advise on when the correct date actually was?

Naturally, I was curious to track down the New Washington Woolies and, indeed, to see whether the building was even still there. The first hurdle was working out where exactly New Washington was, given that it was a name I’d never heard used before. However, a little bit more digging – including references to ‘New Washington Post Office’ – helped me pinpoint the location as what is known today as Concord, close to the busy Concord bus station. Apparently, New Washington – now Concord - was the commercial centre^{[broken link removed]} of Washington new town prior to the building of the Galleries in the 1970s.

Former Woolworths (now Heron Foods), New Washington (Concord) (17 Jun 2010)

Happily, I found that the Arndale Centre is still intact, and that the former Woolworths property is still completely recognisable as the store featured in 100thBirthday.co.uk’s shot from more than fifty years ago. In fact, the whole parade is still rather handsome, with the façade of the former Woolworths unit retaining what looks to be its original green mosaic tiling – quite a delightful architectural feature. It’s just a shame that the first floor windows – open in the 1959 shot – have subsequently been blocked up.

Fittingly, however, the unit is now a Heron Foods, a status shared with quite a number of those Woolies that only closed down eighteen months ago.

Meanwhile, over at Washington Galleries, the main architectural clues to the former status of Woolco – now Asda – are its vast size, and the fact that the interior of the building still has something of the feel of a 1970s structure. At the time, of course, shops of that size – while common today – would still have been few and far between, in the days before Asda Supercentres and Tesco Extras had been thought of. Against this backdrop, it’s easy to imagine how exciting and impressive the enormous Woolco must have seemed when it opened forty years ago.

1970s view of Washington's Woolco

Former Woolco (now Asda) at Washington Galleries (17 June 2010)

Shots of the Washington Woolco seem quite hard to come by, but I’m grateful to Peter for finding the 1970s photograph above in a little book called The Visit of President Carter and Prime Minister Callaghan to Washington New Town, 6th May 1977.

As with the New Washington store, it’s remarkable how similar the building looks now to how it did decades ago – compare the colonnaded entrance, for example. Other than the signage, and the models of cars in the car park, little else has really changed.

While Washington’s two very different Woolies are both long gone, a little bit of retail history is certainly still readable in the buildings that used to house them.