News Column

Store managers to bear brunt as Asda cuts costs

May 16, 2014

Zoe Wood

Asda is axing thousands of middle managers in its stores as part of a big restructuring in which more staff will be employed in e-commerce and grocery home shopping services. The supermarket said a consultation with 4,100 senior store staff had begun. It is thought as many as 2,600 will leave rather than accept an alternative, lower-paid job.

"We haven't updated our structure for five to six years," said Asda's chief operating officer, Mark Ibbotson. "We believe we are about 18 months ahead of our competitors. They're all going to have to do this."

Ibbotson, who is tasked with finding pounds 1bn of cost savings over the next five years, said the exercise would involve a sharp reduction in the number of department managers and the creation of more junior roles on the shopfloor in areas such as click and collect.

The shakeup was revealed as the Wal-Mart-owned grocer reported that like-for-like sales were up 0.1% in the 15 weeks to 20 April. Recent market share data shows that Asda is the best-performing of Britain's big four supermarkets.

Last week, Morrisons, which issued a profit warning in March, posted a 7.1% slump in first quarter like-for-like sales.

Asked if a price war had broken out, chief executive Andy Clarke said: "Not from my perspective . . . We have a strategy, not a slogan." Asda said it had widened the price gap with Tesco, Sainsbury's and Morrisons.

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Source: Guardian (UK)

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