I‘m sure you‘ve heard of Walmart. With over 11,500 stores across the globe, it‘s the world‘s largest company by revenue and the biggest retailer in America. But is this mega US chain also in the UK and London?
The short answer is yes, Walmart does have a presence in Britain. But it‘s not through stores branded as Walmart. The company entered the UK back in 1999 by acquiring ASDA, one of the country‘s largest supermarket chains. While Walmart owned ASDA for years, it never converted the stores into the Walmart name.
So if you‘re visiting London or elsewhere in the UK, you won‘t come across any stores called Walmart. But through owning part of ASDA, the brand still maintains a foothold in the British retail market. Keep reading to learn more about how Walmart first entered the UK, its influence over ASDA, and why the company sold a majority stake in this British chain.
A Quick Look at Walmart‘s Rise to Retail Dominance
To understand Walmart‘s international expansion into the UK, it helps to first look at the company‘sorigins and strategy that fueled its enormous growth:
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Walmart was founded in 1962 by Sam Walton in Arkansas. He opened the first store in Rogers, AK.
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By the early 1990s, Walmart became the largest retailer in the US with over 1,700 stores and $44 billion in revenue.
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Walmart pioneered practices like:
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Everyday low prices on a wide range of merchandise
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Large supercenter store formats
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State-of-the-art supply chain management
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This allowed Walmart to undercut competitors and rapidly expand across America, becoming a one-stop shopping destination.
Walmart Key Facts:
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11,500+ stores in 27 countries
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Employs over 2.2 million associates globally
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Generated $524 billion in revenue in 2020
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Serves over 265 million customers weekly
With this background on Walmart‘s immense growth in its home market, let‘s look at how the retail giant entered the UK.
Acquiring ASDA – Walmart‘s Entry into the UK Grocery Market
In June 1999, Walmart announced it was acquiring ASDA, a major supermarket chain in the UK, for $10.8 billion. This gave the American company a foothold in the British grocery industry and Europe as a whole.
But why did Walmart choose ASDA as its entry point rather than building new stores under its own brand? Here are some of the key factors:
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Established chain: ASDA traced its roots back to the 1920s and had grown to over 200 locations by the 1990s.
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Brand recognition: ASDA was a well-known brand, the third biggest grocer in the UK at the time with 17% market share.
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Financial difficulties: ASDA was facing declining profits and needed an influx of capital to turn performance around.
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Customer loyalty: Existing ASDA customers were used to shopping at their local stores and familiar with the brand‘s offerings.
By acquiring ASDA rather than starting from scratch, Walmart could tap into all of these benefits. It provided a much quicker and lower-risk entry into the crowded UK grocery space compared to launching unknown Walmart stores.
And as we‘ll explore next, Walmart chose to keep the ASDA brand alive rather than rebranding the chain.
Why ASDA Didn‘t Rebrand as Walmart
Even after acquiring ASDA in 1999, Walmart continued to operate the stores under the ASDA name rather than rebranding them as Walmart. But why didn‘t Walmart rebrand it? There are a few strategic reasons the company likely avoided renaming ASDA:
Preserve Customer Loyalty
ASDA had been around since the 1920s and many British shoppers were loyal to their local stores. Converting all the locations to Walmart could have ruined trust and familiarity that ASDA spent decades building.
Fit the UK Market
Walmart is associated with large American-style stores and agressive pricing. Keeping the ASDA brand matched the grocer‘s established identity and reputation in the communities it served across Britain.
Reduce Costs
Rebranding 600+ stores under Walmart would have required major investments – changing signs, uniforms, marketing materials, etc. Sticking with ASDA avoided these expenses.
Regulatory Concerns
UK regulators may have balked at Walmart eliminating a well-known domestic brand. Keeping ASDA may have eased concerns over the American giant‘s market power.
While ASDA retained its name, Walmart did influence parts of the business, as we‘ll explore next.
How Walmart Transformed ASDA
Even as ASDA kept its British brand, Walmart reshaped parts of the supermarket chain to align with its own model:
Store Formats
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Introduced larger ASDA stores with expanded selections in various departments
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Opened "Supercentres" to offer wider merchandise like clothing and home goods
Pricing Strategy
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Shifted ASDA pricing towards Walmart‘s "Everyday Low Prices" approach
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Emphasized low prices across categories to drive value perception
Product Mix
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Increased ASDA‘s own private label brands to provide low-cost alternatives
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Grew the non-food selection to become more of a one-stop shopping destination
So while ASDA maintained its name, customers saw stores transform in layout, pricing, products, and more – changes that certainly reflected Walmart‘s influence. Next we‘ll look at how ASDA and Walmart stores compare.
Comparing the ASDA and Walmart Shopping Experience
Despite the different names, there are many similarities in the in-store format, offerings, and shopping experience between ASDA and Walmart:
| ASDA | Walmart |
|---|---|
| Spacious produce sections at front of stores | Fresh fruits/vegetables at store entrance |
| Bakeries with fresh bread and sweets | In-store bakeries and delis |
| Butcher counters for meat cuts | Meat counters and seafood sections |
| Chilled ready meals and side dishes | Refrigerated heat-and-eat food options |
| Discounted goods specials throughout | "Rollbacks" and special buys on certain products |
However, there are some differences as well:
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ASDA has a stronger emphasis on grocery items
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Walmart offers a much wider array of general merchandise like apparel, home furnishings, electronics, toys, etc.
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ASDA stores are generally smaller formats compared to cavernous US supercenters
So while the two chains share similarities in food offerings, ASDA maintains a tighter focus on groceries compared to Walmart‘s vast product assortment.
Walmart Sells Controlling Stake in ASDA
After over 20 years as majority owner, Walmart sold a controlling stake in ASDA in 2020 to the billionaire Issa brothers, owners of gas station operator EG Group, for $8.8 billion.
The deal provided the Issas with 67% ownership in ASDA. Walmart retained a 27% share, a board seat, and an ongoing commercial relationship with the grocer.
While no longer the outright owner, Walmart stated the shift would allow ASDA to "build a differentiated brand and serve customers" throughout the UK.
So what motivated Walmart to relinquish majority control after having acquired ASDA over 20 years earlier? As we‘ll explore next, it signals a shift in Walmart‘s international strategy.
Is Walmart Moving Away From the UK Market?
Walmart selling most of ASDA indicates the retailer recalibrating its priorities for global growth and expansion.
With the UK market quite saturated and new store openings limited, Walmart seems to be focusing resources on regions with more opportunity:
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Emerging Markets: Walmart sees brighter prospects in high-growth developing markets like China, India, Africa, and Latin America. These regions provide more room for expansion vs the mature UK.
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eCommerce: Walmart has invested heavily in building its global ecommerce capabilities, including a majority stake in Indian online retailer Flipkart.
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Omnichannel Retail: Walmart is focused on leveraging physical stores with digital retail for seamless omnichannel shopping. The UK is likely a lower priority in these efforts.
So while Walmart retains a piece of ASDA, reducing its ownership suggests the UK is diminishing in importance compared to other markets for Walmart‘s global aspirations.
The Bottom Line
Walmart established itself in the UK grocery industry over 20 years ago by acquiring homegrown chain ASDA. While it owned ASDA outright for many years, Walmart never converted the stores under its own American branding. ASDA retained its identity as a British grocer.
With its recent sale of a majority ASDA stake though, Walmart seems ready to turn attention elsewhere for its international growth plans rather than digging deeper into the UK market.
So in summary:
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Yes, Walmart does have a presence in the UK through owning part of ASDA
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But you won‘t actually find stores called Walmart in London or other British cities
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And the future unlikely holds many new UK store openings as Walmart focuses on other global markets
I hope this gives you a good overview of Walmart‘s past and present involvement in the UK! Let me know if you have any other questions.
