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Six weeks after returning to Asda as Chairman, Allan Leighton has launched his first round of cost-cutting as part of an overhaul of the troubled business.
According to The Telegraph, Leighton revealed to staff last week that 13 regional managers would be leaving the business as part of a shake-up aimed at trimming headcount and improving performance.
The restructuring comes after a disastrous festive period for Asda, with recent Kantar data showing the chain suffered a 5.8% fall in sales during the 12 weeks to 29 December.
In an internal memo released on 7th January, Asda’s management confirmed that the restructuring will mean that supermarkets and express stores will now be managed across 22 “sub-regions”, down from 30.
This will mean fewer regional managers across the business with control over more stores.
“Change is never easy and unfortunately we have had to say goodbye to a number of colleagues,” the memo said.
The move comes just two months after Asda announced that it was scrapping around 475 head office roles as part of attempts to “remove duplication and simplify structures”.
Since replacing Lord Rose at the end of November, Leighton has vowed to “restore Asda’s DNA” by cutting prices and improving product availability. However, he has warned that it could take as long as five years to improve the supermarket’s fortunes, raising questions over the stewardship of majority-owner TDR Capital.
Commenting on the article by The Telegraph, an Asda spokesperson said: “We made changes to our field-based retail team regions to reflect the scale of our business across large stores and convenience.
These changes set us up to serve our customers in the best way for 2025 as we deliver Asda Price and other exciting propositions.”
NamNews Implications:
* The key issue for suppliers (and retail rivals?) has to be the extent to which these manpower cuts will be sufficient
* .in terms of “restoring Asda’s DNA” by cutting prices and improving product availability.
* Given the probable five year requirement for improvement of Asda’s fortunes…
* …perhaps the closing of a significant number of stores will be necessary…
* …to allay stakeholders’ fears?
AsdaCutback
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