In the News
Internal Growth - Asda to open more shops at Issa brothers' petrol stations
Economics or Business Management: take your pick. Either way this is a good applied exampleof diversification and internal growth.
Asda is moving into the convenience store market, with the announcement that it's going to roll out a number of Asda On the Move stores. It shouldn't be a surprise, given that the Issa brothers' who bought the company have made their money owning petrol stations. They are the owners of the Blackburn-based EG (Europe Garages).
The takeover involved a large amount of extra debt so the brothers need to make their assets sweat so to speak. Asada products will be supplied to the petrol stations at wholesale prices allowing the latter to make their own retail profit margin or "mark-up".
This will diversify the company's revenue streams and gain it a foothold in a market dominated by its rivals.
For many garages are now mini-shopping centres on the edge of town, more for retail than fuel with easy parking and quick accessible shopping of a range of around 2,000 - 3,000 items.