The second biggest food retailer in Britain, Asda, agreed to buy 12 Safeway supermarket stores from W.M Morrison in Northern Ireland.
The 12 stores are at Cookstown, Kilkeel, Ballyclare, Dundonald, Omagh, Enniskillen, Strabane, Shore Road, Bangor, Coleraine, Newtonards and Westwood in Belfast with total value of 73.6 million pounds.
Presently having 279 stores, Asda, which is owned by Wal-Mart, indicated that it would invest £30 million in revamping the outlets. It will also employ 250 additional staff by Christmas.
The Chief Executive of Asda, Andy Bond stated that this development would bring "real competition" to the Northern Ireland grocery market where the company has made inroads for the first time.
Stores sale was anticipated and predicted following the £3 billion acquisition of Safeway by Morrisons last year. Besides, the Bradford based chain wants to focus on its core competency areas.
The deal, which encompasses four development agreements, still awaits clearance from the Office of Fair Trading. Asda is optimistic and expects that the conversion of Safeway stores will be completed by September, three months from the transaction period.
Asda confirmed that the prices would remain as a benchmark and would match with the stores in England, Scotland and Wales. Besides, existing network of Northern Ireland product suppliers will continue their association with Asda. Also, there would be immense opportunities for new jobs with the introduction of Asda's George clothing range and more general merchandise.
Morrison, headquartered in Northern England with desires to become a national chain and face supermarket operators like Tesco Plc., (Britain’s biggest grocer) bought Safeway based in Hayes.
However, Tesco shares soared to 24 percent whereas the stock in Morrison plummeted to 23%.
With Tesco leading the race with 30% of the market share, the trends of the preceding months denotes that there will prevail stiff competition between Sainsbury and Asda.
Posted
on : Tue, 07 Jun 2005 19:05 GMT | General News
By : Mike Lawson
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