Wal-Mart's Asda chain's impresses, says analyst

Analyst: Wal-Mart's Asda chain's e-commerce functions could help Wal-Mart's grocery operations

Associated Press

NEW YORK (AP) -- Wal-Mart Stores's U.K. Asda grocery business's use of technology to expand its online, delivery and pick-up services for groceries could be the "secret sauce" that helps the world's largest retailer develop its online grocery presence in the U.S., an analyst said Thursday.

Asda offers online grocery services covering 98 percent of the U.K. population. It also has an Asda direct non-food site, a George.com e-commerce site with delivery to Europe, a strong mobile commerce site that accounts for 16 percent of online sales, a "Click and Collect" program that allows customers to order food online and pick up in two hours, and free Wi-Fi in stores.

Citi Investment Research analyst Deborah L. Weinswig said she was "most impressed" by Asda's level of e-commerce sophistication after attending a showcase in London.

"We believe that Asda's expertise with these technologies could be the secret sauce that gives Wal-Mart an advantage in the race to develop online grocery in the U.S., which we view as an attractive growth opportunity for U.S. food retailers," she wrote in a note to investors. She reiterated her "Buy" rating on the stock.

Wal-Mart has been expanding its grocery and perishable food offerings online and on store shelves to help drive customers into its stores.

Shares rose 63 cents to $78.66 in Thursday afternoon trading. The stock reached an all-time high on Wednesday of $79.50.

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