Asda the UK’s third largest supermarket chain is planning a £500m assault on the UK furniture market, believed to be worth £9 billion a year. The company will go head to head with rival stores, such as Ikea, Next and Argos.
The beginning of the new year will see the launch of an internet site dedicated to furniture, and over the next two weeks 800,000 catalogues will be distributed in Asda stores across the country as part of a drive to take hold of a 5 per cent share of the market .
For the last year and a half Asda has been selling a limited furniture range in 35 of its stores, which has generated sales of around £2m a year. However the company’s targets have now been increased with projected sales figures of £500 million by 2012.
The furniture will be branded with the ‘George’ label and will start off at the ‘value’ end of the market. A two seater sofa is expected to cost around £300, half the price of many specialist furniture retailers .
Peter Pritchard, executive director in charge of general merchandise at Asda, answered back at critics who suggested that it may be an inconvenient time to launch, because of increasing fears of a UK housing slump.
“When the housing market slows, people spend more improving their existing home,” he said.
The beginning of the year sees homeowners making big purchases due to January sales, and so the launch comes at a good time for Asda and the market .