Asda to end in-store scratch baking as discount strategy platform stepped up

Date : 15 April 2021

Nick Gladding

Senior Retail Analyst

Asda has announced plans for a major restructuring of its bakery operation that will mean an end to bread and other bakery lines being baked from scratch in-store. The retailer has now launched a consultation with 1,200 staff risk of redundancy across its 341 supermarkets which aims to offer them alternative roles within Asda when possible.

Switch to centralised production

In future, products will be prepared at a central bakery and reheated in-store. Asda says the shift has been prompted by changes in customer behaviour with fewer people buying traditional loaves while demand for speciality breads, wraps and bagels has increased.

Commenting on the change, chief merchandising officer Derek Lawlor said  “The current in-store bakery model has restricted our ability to respond to changing customer demands and offer them the speciality products and freshly baked goods they want to buy throughout the day.”  The proposed changes he said will deliver a much better and consistent bakery offering throughout the day.

Reducing costs

The development is a further example of how Asda is taking action to reduce its cost base to improve its competitiveness as it develops its discount platform strategy.  In February, the retailer announced plans to restructure store operations to better support the growth of e-commerce, a change that will see the launch of a new online trading manager role and removal of deputy store manager role. Just prior to the pandemic, Asda also closed down its meat and fish counters.

Category transformation programme underway

The changes to bakery also feed into Asda’s category transformation programme, a key element of its discount strategy platform. Launched last month and starting with desserts and baking, the programme will curate ranges and enable Asda to offer improved value on the most popular products. By consolidating space for existing ranges, more shelf space will be freed up for fast growth categories such as free from and Plant Based. Surplus space will also be taken up by external brands in Asda’s partnership programme, such as B&Q, The Entertainer, Claire’s and Accessorize.

Read more about the challenges facing Asda here

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