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Thursday, June 25, 1998 Published at 17:13 GMT 18:13 UK

Business: The Company File

Asda to create 3,000 new jobs

A 30% increase in 'George' clothes helped drive Asda's profits growth

Asda has announced at least 3,000 new jobs in six new stores across the UK - on the same day it recorded higher than expected pre-tax profits of 405m.

The jobs are in addition to 4,000 new posts announced earlier this month. The total could be even higher, because as well as the six new stores it is also upgrading six old ones, each of which could need 500 extra staff.

However the majority of the new jobs are likely to be part-time.

[ image: Asda keeps offering its customers new ideas]
Asda keeps offering its customers new ideas
The Leeds-based supermarket chain, now firmly established as Britain's third biggest food retailer, also announced plans to create a new home-shopping service based on the Internet.

Unlike other supermarket home delivery schemes which use existing stores, the Asda service will be served from a dedicated new warehouse in south London. The warehouse, and its associated call centre, will create 170 new jobs.

The home shopping service will target customers in London and the South East where Asda's market share is below its national average.

The company is also considering setting up its own TV channel, possibly called Asda Price TV, which would be broadcast when digital TV makes hundreds of new channels available.

To preview the service Asda will launch its Christmas range through a series of six-minute satellite programmes to go out in the autumn featuring festive food and other products. Orders generated by the TV channel will be handled by the call centre.

Profits surge

Asda claimed the surge in profits vindicated its approach to the supermarket business. Although its 1997-8 baseline pre-tax profits were almost identical to the previous year, their 1997 results were boosted by exceptional profits of 45m.

If they are stripped out, the group showed an underlying improvement of 14%.

[ image: 'George' clothes will soon be available via the Internet]
'George' clothes will soon be available via the Internet
Asda's turnover was up from 6.9bn to 7.6bn as sales from existing stores rose 8.2%, pushing its market share up to a record 11.8% from 11% a year ago.

The figures were ahead of City analysts' forecasts which had predicted profits of around 398m.

Chairman Archie Norman said: "This is a good set of results in an industry which is showing little growth, declining returns on capital and increasing diversification.

Asda's performance was partly thanks to a 30% increase in sales of its 'George' range of own-brand clothing.

The company also says it plans to keep selling designer clothes by labels such as Gucci, Armani and Calvin Klein at up to half price, despite a recent argument with the US label Tommy Hilfiger over the authenticity of goods Asda was sourcing from unofficial markets.

It also intends to keep developing the takeaway food side of its business and is to open Britain's first drive-through integrated hot and cold takeaway at its store in Canterbury, Kent, in July.

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