Asda chief executive Andy Clarke has insisted there will not be a drop in staff morale despite announcing that the retailer will enter into consultation with more than 4,000 in-store managers across the country.
The retailer confirmed trade speculation that stores were to be consulted on proposals to rejig management roles to “more accurately reflect the roles colleagues are now being asked to do.”
Asda said it planned to ditch existing department manager roles from some stores and create section leader posts, as well as new deputy manager, trading manager and section manager roles. Asda claimed the restructuring would put more staff on the shop floor and create up to 5,000 roles - a net benefit of 900 new jobs - though the new positions will be lower paid.
Clarke admitted at its Q1 press conference that the consultation, which will last 12 weeks, will result in job losses. However, he insisted that the majority of staff were behind the decision.
“We have the lowest turnover of staff in this industry and that’s because we keep close to our colleagues and communicate with them in a way our rivals do not,” said Clarke.
“A lot of structural changes take time but staff can see the logic in them, and by adding more shop floor workers, we are improving service and availability. In entering into a long consultation process here we are giving staff plenty of time and communicating clearly as they deserve our respect.”
In recent months, Asda staff have started a petition against the retailer’s plans to replace employee canteens in up to 200 stores with vending machines. But Clarke said that the majority of staff were now “fully behind the idea”.
However, one Asda manager told The Grocer today that the latest decision would hit morale.
“First we had the canteens taken away and now this - potentially thousands of middle managers will lose their jobs and valuable experience will be lost,” he said. ”Morrisons is a great example of what low staff morale can do to a supermarket - that’s the risk here too.”
Another worker posted on The Grocer website: “It never used to be like this here at Asda, it is quite obviously the Walmart influence. Time to give my experience to another more worthy company.”
Despite the further potential job losses, which follow 202 redundancies at Asda House and the George HQ in March, Walmart CEO Doug McMillon said last month that Asda’s growth strategy would create up to 12,000 jobs by 2018.
In that period, Asda is looking to open 40 superstores, 100 supermarkets, 150 petrol stations and 1,000 click & collect points.
Flat sales but “on the right path”
Despite recording only a 0.1% increase in like-for-like sales for the 15 weeks to 20 April, Asda chief executive Andy Clarke said the retailer had started the year “on the right path.”
Clarke insisted Asda was winning back customers from Aldi and Lidl and predicted sales would continue to improve as Asda has “a clear strategy on price and not just a slogan.”
Chief financial officer Alex Russo claimed Asda had continued to reduce the gap with Aldi on price during the quarter.
Clarke added that Asda, despite committing £1bn in lowering prices until 2018, was “not involved” in the price war and said that recent EDLP-based price cuts on 1,200 items at Morrisons was “no different” from what Asda had been doing for years.