Asda has confirmed plans to cut up to 500 jobs in stores and 250 at its head office in Leeds as the retailer battles to protect profits while sales slide. As part of a turnaround plan called Project Renewal the supermarket chain has decided to close staff canteens in all shop and also demands to stop some shopfloor services like photo processing and pizza making. The retailer said about 200 store workers had already got fired and further 300 were likely to go and less than 1000 workers are being feared. The majority of those staff had been reassigned .About 250 jobs are going at its head office in Leeds-we are expecting slightly more than 200.
Asda said that after the meeting with staff about canteen closings they have decided to offer free tea and coffee in all stores and also extra 10%discount on ready- made food like sandwiches ,in addition to the staffs regular 10%discount.The plan to eliminate the morning perk like free tea and snacks out to staffs across 230 stores ,the company faced heavy criticism.
Aldi and Lidl, which have undercut its position as the UK’s cheapest supermarket and Asda is looking for methods to reduce costs as it fighting against these cheapest stores. The chief executive Andy Clarke said under his project Renewal Scheme he wants to halve the price gap with German chains to 5% over the next two years.
Asda is marked as the worst performer of all the major supermarkets during the Christmas period. Last month ,Asda revealed its worst –ever quarterly sales fall ,5.8%sales down at established stores in the 13 weeks to 1january and it was the sixth consecutive quarter of falling sales for Asda.
Clarke said: ”This is a business in financial control and in charge of the decisions we are making not a business in crisis. ”He also informed that Asda was likely to see continuing falls in basic sales this year at its step s up price cut and steers clear of substancial discounts in its challenge to win over shoppers in the long term. Asda said: ”we have informed big changes in the way we run our business and a small percentage of our 140,000 UK colleagues have faced inevitable impact on these changes. But with the active support of the staff we have been able to attain the required changes with flexibility on both sides.”
Asda’s job cuts come after Tesco chief executive Dave Lewis informed that retail jobs were at risk from increasing costs. According to a report by the British Retail Consortium by 2025 there could be 900,000 fewer jobs in retail as costs including business rates and the national minimum wage rise. In the past few years Tesco , Morrisons and Sainsbury’s have all cut staff as they have been forced to cut prices to take on the discounters.