(qlmbusinessnews.com via theguardian.com – – Fri, 8 Dec 2017) London, Uk – –
In document seen by the Guardian, retailer tells staff it needs to cut operating costs to ‘close price gap’ with rivals Aldi and Lidl
More than 800 senior Asda shopfloor workers are facing a pay cut or redundancy in the new year after the supermarket chain embarked on another cost-cutting exercise.
Store staff have been briefed this week on a proposal that could mean 842 section leaders being removed from its store management teams. Thousands of other workers will also be affected by a wider move to cut the number of hours spent on stacking and tidying shelves at 600 supermarkets.
In a document given to staff, and seen by the Guardian, the retailer said it needed to cut costs so it could “close the price gap” with rivals Aldi and Lidl.
It said: “We need to continuously review our operating model. … being the cheapest of the big four is no longer a viable business model. We need to be able to look at ways to reduce our operating costs in order to close the price gap.”
The document reveals that about half of Asda’s 153 smallest supermarkets are loss-making. It says the US-owned grocer needs to find ways of working which are “fit for the future and ensure the longevity of the format”.
A consultation process has now begun. If the plan is pushed through in 2018 the section leaders, who work in both the fresh and packaged food aisles, will lose the higher hourly pay rate associated with the job and “management contribution” hours.
The document then explains: “We would explore redeployment opportunities, and only as a last resort, we would look at the possibility of redundancy with affected colleagues.”
The rise of Aldi and Lidl has forced the mainstream chains to restructure their large store networks. Tesco and Sainsbury’s have also embarked on significant cost-cutting programmes this year. The German chains Aldi and Lidl are continuing to grow rapidly, with Aldi overtaking both the Co-op and Waitrose to become the UK’s fifth largest supermarket chain. Lidl passed Waitrose in August to become the seventh largest.