CIO and digi VP to depart UK retail giant Asda as Walmart divorce woes settle Two of the top team behind Asda's £1 billion ($1.31 billion) tech divorce from US retail giant Walmart — which has seen a number of setbacks — are departing the company. ASDA Brit supermarket finds breaking up is hard to do as Walmart-Asda divorce stretches into fourth year READ MORE Carl Dawson, Asda's CIO, and Rob Barnes, …
The problem is there's no obvious buyer. Any other UK supermarket experienced enough to understand the large format FMCG business would have some big overlap and competition issues , they'd not need all the expensive IT that has just been put in place (likely with big early exit costs), and nobody would need the rather shop soiled Asda brand. Any sane foreign buyer would look at the low margin chaos of the sector and think, nope.
Methinks TDR Capital bit off off well more than they could chew in the first place, went with highly unsuitable "business partners", and then doubled down with the mad acquisition of EG Group's forecourt business. Asda was bought for £6.7bn, the IT and business change was about £1.2bn, EG was £2bn, Asda have around £4bn of debt, so presumably TDR have £6bn (perhaps 40% of their total portfolio) in a low growth cut-throat market (and a possible equal pay settlement incoming of several hundred million).
Or does anybody know different? On the rare occasions I visit it really has a down at heel, everything must go vibe.
Things have improved a bit since Joe Wicks took over from Lord Rose … but tend to agree.
That being said when you talk about mad deals …. Asda made solid boring money for Walmart - their bread and butter and brought additional volume to the global scale, procurement and injection of George into Walmart made the deal perfect.
Since then Walmart have sunk almost USD$17bn into the never made a profit in 20 years Indian Flipkart. Asda proceeds tipped into that sunk cause bubble fallacy - whilst their US/Canada core estate are becoming dowdy whilst Aldi US are rampant… with an improving Lidl US savaging their value proposition with bright and clean new stores.
Sam Walton will be spinning in his grave. Asda Project Future is chump-change compared to the ass-fucking Walmart will get on Flipkart and neglecting their core business.
Why would they do that? Probably 20% of the country are widely traveled/read enough to recognise the Walmart brand, and they're the demographic who would avoid shopping in one.
Maybe another 10% of the population will know Walmart from /r/publicfreakout, or from watching Karen's be racist in one on Twitter. That's hardly a selling point either.
They tried that. In a previous Register discussion on this same IT migration fiasco last year "UnknownUnknown" said:-
[My local store] was co-branded as an Asda-Walmart Supercenter. Didn’t last more than 5 years before new signs.
Anyway, as I've said previously, while the Walmart takeover of Asda in the late 90s was seen as a big deal at the time- having seen their huge growth and disruptive effect on the US market, many speculated they'd do the same to the UK- it turned out to be a complete damp squib.
Asda trundled along much as before, with little obvious change in their market share during the 20 years (1999-2019) that Walmart owned them, something the figures confirm. (In fact, it's Tesco that grew the most during that period).
CrazyOldCatMan noted that this was most likely because the predatory modus operandi Walmart used to enable their takeover of the US market (build several hyperstores in the area, price smaller competitors out of existence, then close most of the excess branches and return prices to normal) don't work in the UK where (a) there is lots of existing competition and (b) stricter planning regulations prohibit flooding an area with stores to drown out the competition.
Doesn't sound much of a loss.
> I visit it really has a down at heel, everything must go vibe.
That's regular Wallmart vibe. It was quite a shock to see how shoddily run was an actual Wallmart in the US during the time Asda was owned by them. Why bother about the look & feel if you want also to forego quality, and only sell yourself based on price?
Both of those clowns had zero respect for the business or the hard working folks who serve and help customers everyday.
All in with Microsoft, without a clue of how much it was going to cost
Hired their best mates at juicy contractor rates
Held the board to ransom when it all just went wrong boss
There should be a fraud squad investigation into how this happened
I'm sure they will both happily retire in the sunset and leave Marcus with a brush with no bristles to sweep up
Buy the business using debt, pocket massive "consultancy fees" and dividends whilst asset stripping the business.
Build yourself five mansions for all your family on green belt.
What's not to like?
Flog the depreciated business off to some other mug.
We have a large Asda in our local town. It's a depressing place to shop. There is no-one on the tills until after 10am and then usually only 1-2 people regardless of the queues. One member of staff looking after 24 automated tills, usually running round in circles looking harassed.
Fruit & veg mostly short dated and of indifferent quality. Limited selection of bread but piles of offers on multi-pack crisps and fizzy drinks plus the inevitable microwave meals.
Once again a good steady company taken to the cleaners by asset strippers.
In addition, having visited the USA, I would avoid anything Walmart like the plague!
“Fruit & veg mostly short dated and of indifferent quality. Limited selection of bread but piles of offers on multi-pack crisps and fizzy drinks plus the inevitable microwave meals.”
Yeah, but we took are country back and we’ll have a trade deal with the US soon to restock the shelves with quality produce, whether we like it or not.
Buy the business using debt, pocket massive "consultancy fees" and dividends whilst asset stripping [ ..it, then.. ] flog the depreciated business off to some other mug.
Exactly this. They bought it in conjunction with a private equity firm, so that's just what one would expect.
"Load it up with debt to another business you control, leach out the value while leaving behind the liabilities, then flog the bankruptcy-bound remains to a greater fool or simply let it go under" is pretty much the modus operandi of PE, and why it has such a bad reputation.
So you're telling me that Asda used to be Zippy, then they added George and now they've Bungle-d?
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