// Issa brothers looking to cut grocery floor space in Asda stores by about a quarter
// This would make way for nail and beauty bars, takeaways and cafes
// The brothers are already trying to add Caffè Nero to the Asda estate
The new owners of Asda are reportedly mulling plans to cut grocery floor space in stores to make way for cafes, takeaways, nail salons and beauty bars.
According to The Sunday Times, the billionaire Issa brothers are looking to shrink grocery floor space in Asda stores by about a quarter in a bid to create new customer experience incentives.
The brothers also reportedly have plans to make Asda’s supermarkets become distribution centres for its online arm.
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It comes after reports last month indicated they were considering spinning off the grocer’s own-brand fashion label George under licence to help reduce debt.
The Issa brothers are already trying to add Caffè Nero to their estate by buying part of its £350 million debt pile.
Mohsin and Zuber Issa have started approaching lenders to the coffee chain seeking to build a position that would allow them to bid for control in a debt-for-equity swap if Caffè Nero was forced to restructure its borrowings.
The brothers, who are co-chief executives of global convenience and forecourts retailer EG Group, acquired a majority ownership stake in Asda late last year.
In February, the Issa brothers and their private equity partners TDR Capital confirmed that their £6.8 billion acquisition of Asda was complete.
However, any plans by the Issa brothers cannot yet be implemented as their takeover deal still needs a final clearance from the CMA.
Asda’s former owner Walmart is retaining a stake in the grocer and is reportedly going ahead with a partnership strategy that could see it introduce Accessorize, Claire’s Accessories and MusicMagpie to its larger stores.
The Issa brothers also plan to replace most third-party convenience stores in EG’s 397 UK forecourts with an Asda convenience store.
They have promised to invest £1 billion in Asda over the next three years.
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