Main Feature Logistics Property
Out of the cold
Asda is taking its plans for a Bristol cold store out of the deep freeze, writes David Thame. The revival of the cold store plan – shelved in 2010 – marks a new phase in the expansion of one of the UK’s fastest-growing logistics networks.
Asda’s 8m sq ft plus property portfolio is being revolution- ised as the supermarket chain expands. The UK’s
second-largest supermarket will open no less than 25 new stores this year as part
controlled fl oorspace in the region. To- day, Asda’s Portbury warehouse, near Avonmouth, is just 247,000 sq ft. The Bristol cold store follows a new Rochdale cold store, now being constructed at the town’s Kingsway business park,
“This is structural - it’s about increasing cavity in some regions, and we are aware of other regions where that may be necessary”
of a £500m investment, adding three new depots and around 600,000 sq ft of retail fl oorspace. More will surely follow. The 500,000 sq ft cold store and 100,000 sq ft pallet cleaning facility could end up anywhere in the Bristol or Swindon areas. What’s certain is that it means a massive increase in temperature-
Non-food warehouse
is no-go If Asda has any plans to expand the distribution net- work for its Asda Living non-food stores, then it’s not told anyone.
Steve Mitchell, partner at Colliers International and an advisor on Asda logistics, says he’s not looking at any non-food warehouse requirements – and that will not come as a surprise to many observers.
In 2010, Asda announced plans for 150 Asda Liv- ing non-food stores by 2015. It was reputed to have its eyes on sites previously occupied by MFI, the furniture chain, which collapsed in the recession.
But growth has been slow. There were 25 Asda Living stores in 2010, and today the fi gure is lit- tle changed. Just one store – in Gateshead – is expected to open this year.
The lack of progress has meant a scaling down of the Asda property team, with two senior directors leaving.
The non-food property team has seen many chang- es of senior staff since 2008. The latest reorganisa- tion means property acquisition is in the hands of regional teams, rather than teams dedicated to the supermarket, small store or Asda Living formats.
46 May 2012 Storage Handling Distribution
www.shdlogistics.com
and a similar £40m facility being built at Grangemouth near Falkirk. All are around 600,000 sq ft. If the plan is rolled out across other regions – as most expect – the new facilities could add at least another 1m sq ft (net) to the Asda distribution portfolio.
GROWING PAINS
But the logistics network has to grow in any case if Asda pushes on with plans to expand its Asda Living homewares outlets, more space will be required. It has also to absorb the needs of the growing 180-strong
small store format created by last year’s takeover of the UK’s Netto supermarkets. Asda is notoriously secretive about its busi- ness and strategies. Privately owned and answerable only to managers at Wal-Mart’s HQ in Bentonville, Arkansas, it can be hard for outsiders to penetrate its corporate culture. However, it’s clear bosses in Bentonville – like Asda chiefs in Leeds – have always been seriously interested in property. Until 2008, Asda owned its own property company, Gazeley, who specialised in building ware- houses. The business was sold by Wal-Mart to Dubai World, the Gulf state’s sovereign wealth fund, for more than £300m. More recently, the large in-house property team has been suffering growing pains. Uncertainties about the future of the non- food Asda Living chain haven’t helped (see separate panel). The future direction of the portfolio – which includes 11 am- bient grocery warehouses, two general merchandise warehouses, four clothing warehouses, eight chilled depots and seven pallet-cleaning centres – is not clear.
Shopping around: Asda aims to open 25 new stores this year.
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