Asda Axing Bonus Payouts For Managers

Asda is reported to have told thousands of senior staff they will not receive their bonuses after a year of declining sales and market share.

According to The Telegraph, more than 10,000 managers have been told that they will not be rewarded with payouts owing to the supermarket’s faltering performance. Typically, managers expect to receive bonuses in the first three months of each year.

The newspaper noted that the bonuses are being axed just months after Allan Leighton returned to the retailer as Chairman, pledging to restore what he calls the “Asda DNA”.

The Telegraph stated that while slashing the bonuses could help fund price cuts that are part of Leighton’s turnaround plan, it is likely to hit already low morale on the shop floor.

A former senior Asda employee said: “Morale will be rock bottom. Even Allan won’t be able to pick them up from this. This will mean some of the top talent looking elsewhere.”

Fewer than half of workers said they were confident in Asda’s strategy in the supermarket’s most recent staff survey. It has also recently faced criticism from union chiefs over how it was making job cuts at its head office without forewarning.

One recruiter told the newspaper that the move on bonuses could lead to “anarchy” within the company. Senior managers are eligible for Asda’s bonus scheme and around 10% of its 134,500 employees received the award last year.

News that they will miss out this year comes just weeks after Leighton unveiled his first round of job cuts as part of a restructuring of its senior teams.

Leighton has warned that it could take as long as five years to revive the supermarket.

Clive Black, an analyst at Shore Capital, noted the new Chairman had injected “new energy”, but said what Asda needed was “a proper overhaul of the group’s engine, not just a 12-month service”.

Leighton is also under pressure to improve performance at a time of looming cost increases across the industry. Black said: “Costs are about to go a whole lot higher, with EPR [Extended Producer Responsibility scheme, a recycling levy], National Insurance and the National Living Wage.”

NamNews Implications:

• Morale impact:
• Good guys leave
• And those that cannot…
• And with the big cost increases yet to hit…
• i.e. EPR, National Insurance, National Living Wage
• (Meanwhile, the good guys apply to Aldi/Lidl?)

Aldi Outsourcing Head Office Jobs To Lower Wage Countries

Days after it was reported that Aldi UK is consulting over proposals that could see up to 350 roles cut at its head office in Atherstone, it has been revealed that the move is linked to the discounter outsourcing roles to lower-wage countries, rather than as an immediate reaction to impending tax hikes.

According to sources quoted by trade magazine The Grocer, Aldi has been outsourcing jobs in finance, human resources and buying, with a focus on administrative roles. The report stated that the discounter had been planning to outsource the roles to lower-cost third-party companies in Eastern Europe and India for about two years before news of the restructuring at its head office broke at the end of last month.

Commenting on the 350 job cuts last week, a spokesperson for Aldi said: “To support our continued growth and to offer the best experience to our customers, we are consulting over proposals to restructure some Head Office teams.

“No customer-facing roles are affected, and no final decisions will be made until the consultation process is complete. We are committed to supporting our colleagues throughout this process. Wherever possible, we will seek to redeploy affected colleagues within the business.”

Yesterday’s report by The Grocer said Aldi has not commented on outsourcing the roles.

In recent weeks, Sainsbury’s, Tesco, and Morrisons have all announced job cuts in the wake of the government’s decision to increase employer national insurance contributions and the minimum wage from April.

NamNews Implications:

• As anticipated, Aldi are cutting costs.
• And outsourcing, where practicable, has to be an option…
• …especially for a global organisation.
• With any savings reflected in shelf prices….
• …which means increased appeal of the Aldi offering.
• Unless we are missing something?

Growth Accelerates At Discounters And Market Leaders But Morrisons And Asda Continue To Struggle

 Kantar: take-home sales UK’s Mults up 3.6% (4 weeks to 23-2-2025, weaker than the 4.3% of the previous month), promos kept price inflation at 3.3%.

Items bought on offer = 27.6% of sales, up 0.3 percentage points vs 2024. Premium own-label up 13.3% this month.

In the 12 weeks to 23 Feb, Ocado was the fastest-growing retailer for the 10th consecutive month, spending up by 9.6% at 1.9% market share.

M&S grocery sales up 12.2% in bricks & mortar stores.

Aldi had 377,000 more shoppers, a 10.3% share, sales up 4.9%, highest since Jan 2024.

Lidl market share up to 7.3%, sales up 8.1% vs 2024.

Morrisons’ share down to 8.6%, store sales flat vs 2024.

Asda sales down 5.0%.

Five years since first Covid-19 UK lockdown in the UK, Kantar outlined how consumers’ grocery habits have evolved since then.

Sally Ball, Kantar head of retail: “Back in 2020, we didn’t know just how big an impact the Covid-19 pandemic would have on our lives, but five years on we can get a picture of its lingering effects on consumers.

"We haven’t gone back to old patterns and shopping trips remain below pre-pandemic times. Households made one less visit to the supermarket in February 2025 than in 2020, while online shopping appears to have stuck, taking a 12.3% market share this month versus 8.6% in February 2020.

“...consumers have moved to simpler eating habits (convenience), taking less time to prepare meals, and prep time in the evening, for example, has declined from almost 34 minutes in 2020 to 31 minutes in 2024.”

Kantar consumption data:

People now using fewer different ingredients when making food (lunch and evening). Consumers snacking less often, dropping over 330m occasions in 2024 versus 2020.

Ball added: “Of course, it’s hard to untangle the cost of living crisis from any post-Covid analysis, and the other big headline of the past few years has been consumers’ hunt for value. You might think that people would shop around more to find the best deals but in fact, that’s not the case.

"Households visited just under five different grocers this month, the lowest level in February since 2021. The growth of supermarket loyalty schemes is partly behind this as shoppers use them to unlock exclusive discounts.”

NamNews Implications:

• The key standout has to be the growing shares of Tesco, Sainsbury’s, Aldi and Lidl…
• …at the expense of Asda and Morrisons.
• Causing us to wonder if there is any way back for Asda and Morrisons?
• The other issue has to be the unprecedented impact of Lockdown on businesses everywhere…
• Resulting in the dilution of consumer belief in ‘everything’.
• Causing consumers to view with suspicion the size of the brand premium when private label ‘substitutes’ were found not to be as much of a compromise as anticipated.
• Begging the question: How much will brands have to spend to win back loyalty?

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Morrisons Bolsters Management Team With Execs From Lidl, Asda And Carrefour

Morrisons is further strengthening its senior management team with three new hires and two internal promotions.

Matt Heslop has been appointed as Director of Convenience and Wholesale, starting early next month. He has worked at Lidl for over 20 years in a number of roles, most recently as Chief Operating Officer and Board Member of Lidl UK.

Matt McLellan has been hired for the newly created role of Group Data and Media Director, which he take on later this year. He will join Morrisons from Asda where he was Vice President – Customer. At Asda, McLellan was responsible for the design and launch of their loyalty proposition and for developing a range of high-profile customer programmes and initiatives.

Meanwhile, Bruno Lebon has been appointed as Group Trading Director, Non-Food, working with Andrew Staniland who started in early February as the supermarket’s Group Trading Director. Lebon has over 39 years of experience at French grocery giant Carrefour, most recently as Executive Director of Supermarkets and Hypermarkets.

All three new hires will report directly to Chief Executive Rami Baitiéh.

Separately, Martin Dawson, who in February last year was appointed interim Operations Director – Retail, has now formally been appointed as Group Retail Director.

Charlotte Exell, the Online Operations Director, has been promoted to take on full responsibility for the Morrisons Online offer in the newly created role of Online Director.

In addition, Rachel Eyre, Chief Customer and Marketing Officer, will be returning to Morrisons on 3rd March from maternity leave.

Baitiéh commented: “I’m very pleased to welcome three outstanding retailers to the Morrisons leadership team and to warmly welcome Rachel back from her maternity leave. All the new joiners have exceptional records in their fields and bring deep experience, a history of delivering growth and a clear customer focus. As Morrisons continues its re-invigoration and growth, their skills and their passion for the customer will make them a powerful addition to our team.

“Martin Dawson has made a significant impact in his new role over the last year and I am delighted to confirm him in the key role of Group Retail Director. And Charlotte Exell has played a vital part in the recent growth of our online business and I’m confident that under her leadership Morrisons.com will go from strength to strength.”

The appointments come weeks after Morrisons posted its strongest quarterly sales growth figures since the start of 2021 as Baitiéh’s turnaround programme picks up speed.

NamNews Implications:

• Significant management changes at Morrisons.
• All wanting to flex and apply their experience optimally.
• Maybe time for Morrisons’ suppliers to reassess team fit with the new lineup…
•  …or risk rivals moving first?

Tesco has confirmed that it will close 10 of its in-store pharmacies later this year.

Tesco has confirmed that it will close 10 of its in-store pharmacies later this year.

The group has not revealed which locations will be impacted or when they will shut, but it stated that the affected pharmacies will continue to operate as normal until their closure.

A spokesperson for Tesco said: “Following a comprehensive review, last month we took the difficult decision to close a small number of our pharmacies later this year, in line with customer demand.

“We remain committed to providing our customers with the very best pharmacy services and continue to have a network of over 350 pharmacies across the country open and ready to help.”

The move comes two years after the supermarket chain announced that it was closing eight of its in-store pharmacies. The locations were all 100-hour pharmacies, and Tesco said at the time that its decision was because “the branches were not seeing sufficient customer demand to sustain their long opening hours”.

At the end of last year, Tesco started partnering with leading healthcare providers to create a new concept that offers shoppers access to more health services in its supermarkets.

In recent years, the wider pharmacy sector has been hit hard by funding cuts, with 222 pharmacies in England closing their doors in 2024 – the second-highest annual closure rate on record.

NamNews Implications:

• For ‘in line with customer demand’…
• …read insufficient sales plus funding cuts.
• Leading to insufficient profitability.
• Resulting in Tesco following national trends in pharmacy outlet closures.
• Until supply meets profitable demand…

B&M Announces Departure Of CEO After Cutting Profit Guidance

Discount retailer B&M issued another profit warning today due to tough trading conditions, while announcing that its Chief Executive Alex Russo would step down after two and a half years in the role.

Just weeks after it narrowed its profit view following a disappointing Christmas period, B&M said today that its adjusted EBITDA was now expected to be in the range of £605m to £625m – down from the previous estimate of £620m to £650m.

The company stated that the lower forecast “reflects the current trading performance of the business, an uncertain economic outlook and the potential impact of exchange rate volatility on the valuation of our stock and creditor balances, which is a non-cash item.”

In recent months, most of the UK’s major retailers have warned of a tough year ahead due to the continued cost of living crisis and the government’s decision to raise employer national insurance contributions, which is expected to lead to job cuts and higher prices.

Amid the rapid expansion of its store estate, B&M has looked to increase the number of items it sells and leaned on its competitive pricing to counter consumer caution. However, its like-for-like sales slid 2.8% over the key Christmas period, which was the chain’s third successive quarter of decline as cautious consumers reined in their spending.

Russo, who has held the top job since September 2022 and was earlier its finance chief, will retire at the end of April. B&M said it was in the advanced stages of a recruitment process to appoint a new CEO and will provide an update in due course.

Analysts at Jefferies said the management change was of “limited surprise” and noted that the profit warning indicated that an improved December/January like-for-like trend that B&M highlighted last month had not been sustained.

Tiffany Hall, Chair of B&M’s Board, commented: “Alex has increased our store footprint in both UK and France and driven a relentless focus on high operational standards and low costs, enabling the company to provide great products and everyday low prices to our customers whilst generating continued strong cash returns for our shareholders. We wish him well for the future.”

Russo added: “The business has been successfully steered through the pandemic years and is now larger and stronger, with group revenues increasing by almost 50% and cash distributions to shareholders in excess of £2.0bn during my tenure. It has been professionally rewarding to assemble and work with a high-quality leadership team and to retire leaving growing businesses with great potential in both UK and France. I wish the Board and the leadership team every success in the years ahead.”

NamNews Implications:

• To non-City eyes, a 2.5% drop in anticipated EBITDA seems trivial.
• But always good to manage expectations…
• Meanwhile, B&M is still worth a supplier-bet…
• …given its business model is better than most, for uncertain times.

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Asda Avoids Fine Despite Missing The Deadline For IT Upgrade

Asda has avoided a hefty penalty charge despite missing a target for separating its IT systems from former owner Walmart.

According to The Telegraph, the US retail giant has agreed to push back the deadline for the £800m project, which has seen Asda untangling thousands of programs responsible for checkouts, administration and payroll.

After being acquired by TDR Capital and the Issa brothers in early 2021, Asda had been aiming to complete the IT changeover, named Project Future, by February this year. Last month, industry sources warned that Asda risked millions of pounds worth of charges if it missed this target.

The Telegraph reported over the weekend that Walmart and Asda have now come to a revised agreement, including scrapping the February deadline. It follows a series of setbacks for the project, which had been touted as “mission critical” to Asda’s revival plans.

A spokesperson for Asda told the newspaper: “We continue to make good progress delivering Project Future and have successfully migrated large parts of our business to brand-new systems.

“We will continue to take a pragmatic approach when delivering the remainder of the programme, and Walmart continue to be incredibly supportive in every way in helping with the implementation.”

NamNews Implications:

• Meanwhile, given that their IT systems still need adjusting…
• …suppliers (and shoppers) may wonder about the effect on service level…
• …and react accordingly?

Aldi Raises Hourly Rate Again To Maintain Position As ‘Britain’s Best-Paying Supermarket’

Just weeks after announcing that it was increasing its hourly wages, Aldi has raised the rate again. The move comes days after key rival Lidl said it would offer its UK store staff a better rate that would have meant Aldi was no longer Britain’s best-paying supermarket.

From 1st March, Aldi Store Assistants will now be paid at least £12.75 per hour nationally and £14.05 within the M25. On 21 January, the discounter announced a rise to £12.71 nationally and £14.00 within the M25.

The rates exceed the Real Living Wage set by the Living Wage Foundation in October last year, with some staff seeing higher wages based on their length of service.

Aldi has also committed to a further pay increase for store staff from September, taking its minimum rates to £12.85 per hour nationally and £14.16 within the M25.

“This latest increase recognises the important contribution that our colleagues make day in, day out and ensures they are rewarded fully for their contribution with industry-leading pay,” said Giles Hurley, Chief Executive Officer of Aldi UK and Ireland.

“Every member of Team Aldi plays an important role in providing the best products, service and value to the millions of shoppers that visit our stores.”

Aldi revealed yesterday that it plans to invest £67m in upgrading its existing stores during 2025 as part of a programme to improve the shopping experience for its customers.

NamNews Implications:

• Who would have thought?
• Two discounters vying to be the highest retail payer of staff in the UK.
• If the quality of workers follows the rate of pay, then shopfloor motivation will make a difference…
• More reason for retail rivals to watch?
• And begging the question: Can any supplier afford to ignore the discounters?
• (just implying…)