Asda restructures to prioritise ecommerce

Date : 25 February 2021

Nick Gladding

Senior Retail Analyst

Asda has announced plans to transform how it serves online demand  - with a big expansion of its store pick model, the proposed closure of two home shopping centres and a consultation to simplify ways of working across store teams.

Responding to a structural shift in demand

Providing context for the changes, Asda noted how it has increased online capacity by 90% since last March to 850,000 weekly slots and is on course to fulfil one million orders per week by the end of the year. To support this shift in demand, Asda will now expand its store pick model. This investment, which will create 4,500 new store-based online roles, will be counterbalanced by a reduction of around 5,000 roles elsewhere in the business.

Closure of home shopping centres

Asda proposes to close two home shopping centres at Dartford and Heston, with orders in future fulfilled from local stores. Asda expects the change to in-store picking to create greater capacity, improve slot availability, increasing opportunities for customers to utilise same day delivery, express one-hour collection and Uber Eats delivery.

Changes to store management roles

Reflecting the importance of e-commerce to stores, Asda also proposes to replace the deputy store manager and section leader roles at its stores with the new roles of operations manager and online trading manager. These proposals would impact c. 1,100 colleagues and if enacted would lead to an overall increase in headcount in store-level management roles across the business.

Towards a multi-skilled back office

A further 3,000 colleagues could potentially be impacted by proposals to simplify back office functions. In future and supported by more technology, multiskilled colleagues could work across cash office, administration, people and training tasks.

Where next for Asda?

Coming a week after the Issa Brothers completed their acquisition of the business, these proposals demonstrate how Asda is refocusing to prosper in a fast-changing market. While Asda has been building online capability and expertise for a number of years these proposals will accelerate the pace of change. Online will become a much larger contributor to sales at stores which will need alternative revenues sources to be profitable. Expect more tie-ups with third party retailers such as B&Q and Decathlon and with foodservice operators. At the same time EG’s forecourts offer much potential for the rollout of Asda on the Move stores and boosting Asda’s click & collect site network.

Adapting to the accelerated pace of change

Summarising the proposed changes CEO Roger Burnley, said: “The pandemic has accelerated change across the retail sector especially the shift towards grocery home shopping and our priority is to serve customers in the way they want to shop with us. The last 12 months have shown us that businesses have to be prepared to adapt quickly to change and I am incredibly proud of the way we demonstrated our agility and resilience through the pandemic. As customer habits continue to change we have to evolve our business to meet these demands and ensure our business is strong and sustainable for the long term.

“We know that these proposed changes will be unsettling for colleagues and our priority is to support them during this consultation process. Our plans to transform the business will result in more roles being created than those we propose to remove and our absolute aim is to ensure as many colleagues as possible stay with us, as well as creating the opportunity to welcome new people to our business.”

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