Asda plans ‘hundreds of job losses’

By Laurence Gibbons

- Last updated on GMT

Asda has confirmed it has made 'difficult' decisions relating to staff at its Leeds head office
Asda has confirmed it has made 'difficult' decisions relating to staff at its Leeds head office

Related tags Head office Inflation Asda

Asda is planning to axe hundreds of jobs at its head office and has opened talks with staff about the ‘difficult’ structural changes.

Asda confirmed it believed the job losses would be in the low hundreds at the Leeds head office, which employs 3,000 people.

The retailer said external pressures had accelerated at an “increasingly rapid rate”​ over the past 18 months, forcing it to make changes to the way it does business.

“Today, we have started to talk to our colleagues in head office functions about what this means for them,”​ a spokeswoman said.

“We have made some difficult but necessary decisions but we must discuss these with our colleagues before we talk publicly.”

Radical changes

The consultation with employees comes off the back of customers “radically”​ changing the way they shop, she added.

Asda had launched a new strategy in 2013 to respond to the changing market but it has been faced with accelerating pressures, she said.

Last week, Asda invested £500M in price cuts​ as part of “radical action” ​to win back customers from the discounters and widen the gap between its competitors.

Asda moved to join forces with European Marketing Distribution (EMD), a European buying alliance made up of 14 national buying structures and pools the collective buying power of 250 supermarket chains.

The retailer’s boss Andy Clarke said joining forces with the EMD network would give Asda​significant economies of scale”.

Sales growth

“We’ll continue to work with our suppliers to lower costs in our supply chain and return sales to growth in partnership,” ​Clarke said.

“But we are not complacent.  We remain cautious and, as the chancellor ​[George Osborne] warned on Thursday, we expect that 2016 will be another year of intense pressure at a macro-economic level in addition to sales remaining under strain from price deflation, a continued competitive background throughout the sector and radically changing customer shopping habits.” 

It has been a year full of change already for Asda, as the retailer took full control​ of two of its meat suppliers Kober and Forza AW as part of a bid to simplify its supply chains.

Market analyst Shore Capital said food manufacturers should not fear​ Asda taking control of the meat processors.

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