In the face of the headwinds in which the UK grocery market has had to operate, Asda has never shirked from taking difficult decisions.

The scale of the potential cutbacks, however, will have been among its toughest yet owing to the size of the job losses.

Asda Grantham1

Asda Grantham1

Asda has launched a consultation into 5,000 jobs across its stores as the embattled supermarket giant seeks further cost savings

The grocer announced last week that it was to launch a consultation into 5,000 jobs across stores, although it added that the scale of this consultation did not reflect the number of jobs that would go. 

The news came days after the Walmart-owned business said that up to 300 jobs were to be axed at its head office in Leeds.

Both moves are part of its ongoing ‘project renewal’, an 18-month initiative aimed at prioritising investment to better address the rapidly shifting consumer landscape.

The grocer also said it was scaling back a number of services, from pharmacies to the ‘create your own pizza’ counters.

Facing down challenges

Asda has talked about the need to create a more agile business to better meet the changing demands of its customers, but it also referenced the ongoing challenge of remaining competitive on price.

“Under Andy Clarke, Asda has been one of the most innovative retailers in the UK and at the vanguard of those that identified the need to restructure to face up to a digital world”

Chris Brook-Carter

Under boss Andy Clarke, Asda has been one of the most innovative retailers in the UK and at the vanguard of those in the sector that have identified the need to restructure to face up to a digital world and face down the threat of Aldi and Lidl.

Despite that foresight, Asda has also proved to be particularly vulnerable to the march of the discounters.

The Leeds-based retailer has set the pace among the big four in terms of fighting back on price, with £1bn of price cuts since 2013 that were backed up by a further £500m this month.

This latest tranche of redundancies is a painful reminder that these investments in price and infrastructure need to be paid for.

But Clarke and the Asda leadership team also know that, while it remains imperative they protect profits, a return to sales growth is equally important if the business is to weather the storm in the long term.

Bunnings will be a shot of innovation in the DIY market

Bunnings, the Australian DIY retailer set to acquire the UK’s Homebase, may have been around since 1886 but it has proven itself a real innovator from among the Wesfarmers business and one of its fastest growing brands.

Bunnings carpark January 2016

Bunnings carpark January 2016

Homebase will be rebranded as Bunnings under new Australian parent Wesfarmers

It will have to move fast to understand the idiosyncrasies of the UK market.

But the £500m war chest it has pledged to invest in Homebase, allied to a track record for engaging its customers with real flair – from its ‘sausage sizzle’ barbecues to its ‘how to make a hula hoop’ social media campaign – promises to shake up the sector.