Grocery giant Asda has entered formal consultation with 5,000 of its staff as it unveiled new transformation plans aimed at capitalising further on the shift to online grocery shopping.
The retailer said it would try and move “as many colleagues as possible into alternative roles within Asda” with redundancy being “the last option” for the 5,000 staff in consultation.
Asda also said as part of its transformation it would look to create 4,500 new roles in store-based online operations across the country.
The retailer said 800 staff would be affected by the closure of Asda’s Dartford and Heston dark stores. It also unveiled plans to replace deputy store manager and section leader roles with new roles – operations manager and online trading manager – which would affect 1,100 staff.
The final part of the business affected by the changes will be “back-office store functions” including cash office, administration, people and training tasks, and will affect 3,000 staff.
Blackburn-born brothers Mohsin and Zuber Issa became the most-talked about pair in retail when they won the hard-fought battle to buy Asda in October.
The £6.8bn deal will be the largest leveraged buyout in UK retail since KKR’s acquisition of Boots in 2007. However, concerns are rife about how the Issas, who have remained tight-lipped since the acquisition was revealed, plan to run Asda and what impact such large debt levels will have on the retailer.
Retail Week speaks to those close to the business to find out how the Issas plan to run one of Britain’s biggest retailers.
Asda said it had “seen a structural shift in customer behaviour towards online grocery during the pandemic, consistently growing ahead of the market” and had grown its capacity 90% in that time.
As a result, it would be creating 4,500 new roles to expand its ‘in-store pick’ ecommerce fulfilment model.
Chief executive Roger Burnley said: “The pandemic has accelerated change across the retail sector especially the shift towards grocery home shopping and our priority is to serve customers in the way they want to shop with us. The last 12 months have shown us that businesses have to be prepared to adapt quickly to change and I am incredibly proud of the way we demonstrated our agility and resilience through the pandemic. As customer habits continue to change, we have to evolve our business to meet these demands and ensure our business is strong and sustainable for the long term.
“We know that these proposed changes will be unsettling for colleagues and our priority is to support them during this consultation process. Our plans to transform the business will result in more roles being created than those we propose to remove and our absolute aim is to ensure as many colleagues as possible stay with us, as well as creating the opportunity to welcome new people to our business.”
A spokesman for the retailer said the decision had not been made by Asda’s new owners the Issa brothers or TDR Capital, which are still under a ‘hold separate’ notice while the Competition and Markets Authority completes its inquiries.