Asda to cut hundreds of jobs at UK head office
15:59 18 January 2016
Asda is set to cut hundreds of jobs as the UK’s supermarket price war continues to reshape the industry.
The chain, which is owned by US retail giant Walmart, said it will make cuts in the “low hundreds” at its Leeds head office, which employs 3,000 people.
The cuts come as the grocer is expected to post the worst sales figures among its major rivals for the key Christmas trading period.
The industry’s so-called Big Four players - Asda, Tesco, Sainsbury’s and Morrisons - have seen prices fall for more than a year under pressure from discounters such as Aldi and Lidl.
An Asda spokesman said: “As a result, the industry faces major challenges and the certainty of permanent structural change. In the context of this, we also have to further change the way we do business.
“Today, we have started to talk to our colleagues in head office functions about what this means for them. We have made some difficult but necessary decisions but we must discuss these with our colleagues before we talk publicly.”
Analysts expect Asda to turn in quarterly like-for-like trading covering the Christmas period down by around 3.5%, compared with a year ago.
This comes on top of a November update, which revealed that like-for-like sales fell 4.5% in the 13 weeks to September 30.
At the time, Asda chief executive Andy Clarke said the decline highlighted a “challenging” quarter for the group, but put faith in his recently-announced turnaround plan - dubbed Project Renewal - to bolster trading.
Over Christmas Morrisons posted a 0.2% rise in same-stores sales for the nine weeks to January 3, while Tesco reported a 1.3% rise in like-for-like sales over the six weeks to January 9.
Sainsbury’s posted a 0.4 like-for-like sales fall in the 15 weeks to January 9, which was lower than expected.
Asda announced a fresh 18-month overhaul in October which will see it slow store expansion in London, ease up on plans to build more stand-alone petrol stations across the UK and scale back the rollout of its “click and collect” scheme as it seeks to cut costs.
However, it will speed up investment to revamp 95 of its largest stores and spend more money on offering customers lower prices in an attempt to take on the discounters.
It will also permanently close its business-to-business sales operation, which focused on selling direct to other businesses, in the next few months.