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Asda unveils far-reaching shift online – creating 4,500 jobs but putting 5,000 at risk

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Image courtesy of Asda
Image courtesy of Asda
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Asda unveils far-reaching shift online – creating 4,500 jobs but putting 5,000 at risk

Asda has unveiled a huge shift online for the business, one week on from its change of ownership. The supermarket promises 4,500 new jobs as the supermarket moves to picks more online orders in-store. But the move puts 5,000 existing jobs at risk.

 

The retailer says it will move existing staff to new jobs where it can, with redundancy the last option. The GMB says that more than 3,700 jobs could be ultimately lost as a result of the move. The move comes just over a week after new owners the Issa brothers, in partnership with TDR Capital, took over the business from Walmart in a £6.8bn deal.

 

Asda chief executive Roger Burnley says: “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.”

 

The plans come as more shoppers are buying from Asda online, following the disruption brought by the Covid-19 pandemic. The supermarket has already increased its online capacity by 90% since March to 850,000 delivery slots a week, and it expects to fulfil a million orders a week by the end of the year.

 

As ecommerce grows, the supermarket will now take online fulfilment in-store, closing two online fulfilment centres, in Dartford and Heston with the loss of about 800 jobs. In the future, online orders in the south of the country will be picked from local stores in a way that Asda says will improve availability, capacity and service. The move to store picking, it says, will mean that it is easier for customers to use same-day delivery options including one-hour collection and delivery via Uber Eats.

 

Jobs will also be hit as store management is streamlined. Around 1,100 deputy store manager and section leader roles will be replaced by two new jobs – operations manager and online trading manager. Asda says the move will mean an overall increase in the number of people working in store-level management jobs.

 

Around 3,000 back office jobs will also be affected as cash office, administration, people and training work is simplified into work done by one back office member of staff. Asda says less cash is now handled in-store, and staff can be trained to use new technology to complete “multiple back office tasks”.

 

The GMB Union says it has begun consultation with the retailer about 3,700 potential job losses.

 

Roger Jenkins, GMB national officer, says: “Asda workers have had a torrid two years. The failed Sainsbury’s takeover, twelve months working on the pandemic frontline and now the uncertainty of a new take over, saddling the company with huge debts and potential sell offs.

 

“This is the last thing they need. The scope of today’s announcement means 5,000 people have their lives put on hold. It’s not right. Asda is a profitable company that does not need to enforce redundancies. GMB will battle hard to make sure no one leaves their job unless they want to.”

 

Understanding the context

Asda’s move reflects the experience of both Morrisons and Co-op in recent months in a grocery market that has responded fast to the disruption brought by the pandemic. Both have used their stores as fulfilment centres in order to support online deliveries. That makes it quicker to roll out the service, while also enabling faster same-day deliveries since both have hundreds of stores that are inevitably closer to customers’ homes than a smaller number of dedicated distribution centres.

 

Morrisons has expanded its online operations through its stores, in part since it rethought its strategy after capacity at Ocado’s distribution centres was hit by a fire at the Andover centre. It has cut costs by choosing to fulfil orders from its own stores and during the pandemic has

 

Co-op, meanwhile, has used a wide variety of delivery partners, from StarshipTechnologies robots to delivery apps including Buymie, Pingu and Deliveroo. it’s capitalising on a shift to headless commerce that it put in place just as the pandemic emerged.

 

Find out more about how the online grocery market has developed during Covid-19 in two recent RetailX publications: the RetailX Top500 2021 report, and the RetailX Grocery Innovation 2021 report.

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