Hemant Patel FCMA: retail finance director, Asda.

Position:ONE2ONE - Interview
 
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Asda is the second-largest supermarket chain in the UK. What's your role here?

I provide day-to-day and strategic financial support for 371 stores and 25 distribution centres around the UK. Asda is owned by Corinth Services, a subsidiary of WalMart, the world's biggest private-sector employer, and my main role is to provide financial management for most of Asda's cost base: employees, capital investment and utilities. So I am involved in things ranging from investment appraisals for property development to setting performance targets.

There are 25 to 30 people working with me at Asda House in Leeds and we deal with hundreds of profit-improvement managers, who handle processes in stores, and depot finance managers. Our store and depot managers run their businesses, so they also need to be financially aware.

And you're opening more superstores and developing new markets this year.

We're building ten food stores and extending another ten. We've also been working on other formats: 24 non-food Asda Living stores and a new division of supermarkets of up to 25,000sq ft. These smaller outlets represent a big opportunity, because they will enable us to enter new markets. The big stores work best when they're near larger towns and cities, while these will be suited to smaller towns.

It's brave to be considering expansion at the moment. Why do it now?

We're second-largest UK supermarket chain in sales after Tesco, but we have fewer stores than most of our rivals. All the supermarket chains are expanding now. Our industry has been relatively strong for the past two years, despite the recession. In fact, it's the first time that all of the UK's big four have been performing strongly at the same time.

We analyse our market share across the country to work out where we should go next. I'm appraising potential new sites to understand the true affordability of the land. Wherever we look, we know our rivals will be bidding against us. We can't pay too much, but we don't want to lose the sites we need. There's lots of capacity for more stores across the UK, so we're not targeting any one region.

Aren't there strict legal regulations over the location of new UK supermarkets?

Supermarket development is one of the most heavily regulated areas of the UK planning system. Current policy promotes development on sites that are closest to town centres. The Competition Commission has proposed a new test that will give councils a tool to promote competition, which we...

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