Asda takeover could hit design

Asda’s rostered packaging design consultancies are likely to be severely hit by this week’s £7bn takeover of the supermarket chain by Wal-Mart, the world’s biggest retailer.

Though Wal-Mart and Asda executives told staff at Asda’s Leeds headquarters on Tuesday morning that it will be business as usual, industry watchers say the US giant’s successful global retail strategy is based on a policy of low-price branded goods, rather than own-label products.

The majority of Asda’s own-label packaging is handled by external groups, including Elmwood, FLB and Visuality. Around 40 per cent of packaging work is carried out in-house.

SG retail analyst Nick Bubb confirms that though Wal-Mart and Asda are similar in terms of low prices and friendly service, Wal-Mart focuses on branded products. He says, “They are not necessarily top brands, but they do very low prices on secondary and tertiary brands rather than own-label products.”

But Asda head of design Carol Turner denies design groups are in a fragile position. “The Asda own-brand is a hugely important part of our strategy,” she says.

Wal-Mart executives have told Asda staff there are no plans to drop the Asda name, and no immediate plans for any other kind of rebranding. But in its only other European takeovers, both in Germany, the group has begun converting the branding of the Wertkauf and Interspar chains to the Wal-Mart name.

Store layouts, which are predominantly handled by an in-house design team at present, are expected to remain the same in the short term. They may change as the wider Wal-Mart product ranges are implemented.

Wal-Mart has more than 3500 stores worldwide and achieved a turnover of £85bn last year. Its overall strategy concentrates on low price and extensive product range.

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