23/01/2012 04:36 GMT | Updated 23/01/2012 06:39 GMT

Asda To Invest £500m, Create 5,000 Jobs In Expansion Drive

Asda, the supermarket chain owned by US retail giant Walmart, is to invest more than £500m in its UK operations in 2012, opening 25 new stores and creating 5,000 new jobs.

The expansion will add more than 600,000 square feet of retail space, the company said, through a combination of small-format local shops, superstores and Asda Living homeware outlets. The company will also refurbish 43 existing stores and offer its staff the opportunity to join apprenticeship schemes.

The chain will open new depots in Rochdale, a replacement depot in Scotland and will upgrade another in Yorkshire as part of a drive to make its logistics more efficient.

“The additional investment and 5,000 new jobs announced by Asda today will be a real boost for the economy and more importantly for people around Britain seeking jobs," Prime Minister David Cameron said in a statement accompanying the announcement.

“I also welcome Asda’s commitment to not only create jobs but invest in their staff too; offering employees the chance to join an apprenticeship scheme to gain skills which will benefit them throughout their career.”

Asda is yet to report its Christmas trading figures, which will be keenly watched following a weak showing from the country's largest retailer, Tesco, which surprised the markets in January with a profit warning after its worst Christmas in decades.

Tesco was forced into an aggressive price cutting campaign in the summer as sales of basic goods began to slow in the face of strong economic headwinds. However, other retailers responded with discounts and took some market share, with Sainsbury's reporting a strong showing.

Asda has a smaller reach than Tesco, Sainsbury's and Morrisons, with around 525 stores, employing around 180,000 staff.

“This announcement by Asda will certainly be welcomed to the retail industry," Jon Copestake, retail industry analyst at the Economist Intelligence Unit said in an email.

"However, the bad news continues to outweigh the good in the retail sector and the economy as a whole. The administration of Peacocks threatens more job losses in the coming weeks than Asda proposes to create all year, although some of these should be retained thanks to the sale of units such as Bon-Marche. Equally, the creation of 5,000 retail jobs is a drop in the ocean when considering [the Office of National Statistics] released figures of 2.69m unemployed last week, the highest unemployment rate in 15 years and a quarterly rise of 118,000.”