Whether it’s total till roll, grocery or just food and drink, the latest 12-week Kantar trading update shows Asda once again leading the big four in terms of growth - proving that its early investment in the sort of value-sapping but potentially volume-enhancing KVI price cuts in which its rivals are belatedly engaged is currently a more effective foil to the discounters than hefty promos , coupons and the like.
“To its great credit, Asda listened to store staff feedback and scaled back the cuts”
Adam Leyland, Editor
So staff morale at Asda should be fantastic right now. Except it isn’t. Or at least it hasn’t been. The decision to delay a first wave of 150 job cuts at its Leeds HQ and 50 at the George HQ in Leicestershire in March, four months after unveiling its five-year plan, was perhaps understandable. CEO Andy Clarke didn’t want the vital Christmas trading period to be disrupted (although surely the five-year plan itself could have been delayed). But it’s been the staggered announcement of a further in-store management restructure impacting 4,100 department managers that has really set the cat among the pigeons.
Clarke was very clear the restructure was as much about having an in-store workforce that was fit for purpose in these changing times as it was about cutting costs to support the five-year plan’s £1bn target in cost savings. But to a loyal workforce (with whom Clarke was always massively popular as its former retail director), a programme of redundancies that also involves the redeployment of staff on a lower pay structure is always going to be a hard sell (the same reasoning was also used by CEO Dalton Philips to justify a similar Morrisons restructure ).
And with a 45-day consultation period creating an agonising vacuum, affected Asda staff - disenchanted, cynical and scared - took to The Grocer’s forum to fill it, speculating wildly and giving full and untrammelled expression to their fears and concerns.
In the event, Asda listened to the feedback, particularly through the National Manager Colleague Voice Group it set up, and has halved the number of expected redundancies . And for that it deserves credit. Now what it needs to show is that the strategy underpinning the restructure can work.
Sainsbury’s outgoing CEO Justin King has been a lone voice in observing the harm that can be done when shop floor cuts affect customer service. It can be a vicious spiral. But Clarke insists the restructure, far from adversely affecting customer service, will boost shop floor presence. It sounds clever and progressive. The proof will be in the pudding.