Walmart Sells Majority Stake in Asda

Walmart sold a majority stake in Asda to a consortium that includes brothers Zuber and Mohsin Issa and the private equity firm TDR Capital in a deal that values the supermarket chain at about $8.8 billion, reported BBC (Oct. 2).

The sale means the grocer will return to a majority UK ownership for the first time in two decades. The Issa brothers also own EG Group, which has over 5,200 petrol stations.

Under the new owners, Asda will invest about $1.3 billion in the supermarket over the next three years, according to Walmart. Walmart decided to sell the controlling stake in the grocer after shelving plans to float the business following a failed merger with Sainsbury’s—which was blocked on competition grounds.

Walmart bought Asda in 1999 for about $2.7 billion and it will retain a minority stake in the supermarket chain. The company will also keep its headquarters in Leeds and its CEO will remain.

Asda will test the Asda On the Move concept at three of those locations as it aims to move into the convenience store business.

“We believe that our experience with EG Group, including our expertise around convenience and brand partnerships and our successful partnership with TDR Capital, can help to accelerate and execute that growth strategy,” the Issa brothers said.

In other Walmart news, a survey from UBS shows that 57% of Walmart shoppers indicated being “very likely” or “fairly likely” to sign up for Walmart+, the retailer’s new subscription service, reported The Wall Street Journal (Oct. 2). Another survey from Digital Commerce 360 shows that around 48% of consumers who shop online at least weekly say they are “somewhat or very likely” to join Walmart+.

Although Amazon can be viewed as direct competition to Walmart+, some shoppers are willing to use both. Almost 30% of consumers who shop on but not said they were interested in joining Walmart+, according to Digital Commerce 360.

The service, which launched in mid-September, has a more affordable price of $98 a year compared to Amazon Prime’s $119. However, it has fewer perks. It offers unlimited free deliveries, but requires a minimum order of $35, and lacks a video streaming service.

More than 90% of Americans, or 115 million households, already shop at Walmart at least once a year, according to the company, and UBS estimates that if Walmart adds 10 million users with each spending an incremental $100 a month, Walmart’s expected sales growth in fiscal year 2022 would be lifted by 30 percentage points.

Having more-frequent traffic on the website also creates potential for more advertising revenue, even without a TikTok deal. already has more than 400 million monthly web and mobile visitors, according to SimilarWeb.

Meanwhile in stores, Walmart is looking to airports for inspiration in new designs, signage, and layouts, reported Yakima Herald-Republic (Sept. 29).

“We were inspired by airport wayfinding systems as best-in-class examples of how to navigate large groups of people,” said Janey Whiteside, EVP and chief customer officer at Walmart’s U.S. division.

The company is testing a new concept, which features signs with bold dimensional typeface spotlighting sections and a focus on smartphones, in one store currently. It plans to roll it out to 200 stores by early 2021 and 800 more by early 2022.