Asda has scrapped bonuses for thousands of managers following a year of decline at the struggling supermarket chain.
More than 10,000 managers have been told they will not receive their expected payouts due to the retailer’s faltering performance.
Managers typically receive these bonuses in the first quarter of each year.
The decision comes amid mounting pressure on the supermarket to improve its financial results.
More than 10,000 managers have been told they will not receive their expected payouts
ASDA
Asda has seen its market share shrink from 13.7 per cent to 12.6 per cent over the past year.
The supermarket recorded its worst Christmas performance in a decade.
Sales dropped by 5.2 per cent in the 12 weeks to January 28, according to industry data from Kantar.
The bonus cuts come weeks before Asda is set to unveil its financial results, which are expected to highlight the scale of its struggles, according to the Telegraph.
The bonus cuts coincide with Allan Leighton’s recent return to run the supermarket after more than two decades away.
Leighton, who is credited with turning Asda into a retail powerhouse during the 1990s, has pledged to restore what he calls the “Asda DNA”.
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Asda recorded its worst Christmas performance in a decade in 2024
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He has warned that it could take as long as five years to revive the supermarket.
“It’s going to take us that long to get it right,” Leighton said last year.
A former senior Asda employee warned: “Morale will be rock bottom. Even Allan won’t be able to pick them up from this. This will mean some of the top talent looking elsewhere.”
Fewer than half of workers expressed confidence in Asda’s strategy in the company’s most recent staff survey.
One recruiter suggested missing out on bonuses could lead to “anarchy” within the company.
The cuts may help manage costs but will likely further damage shop floor morale.
Asda also faces pressure from looming cost increases across the industry
PA
Asda has struggled since its takeover by petrol station tycoons the Issa brothers and private equity group TDR Capital in February 2021.
Lord Rose, who ran the supermarket until November, called Asda’s performance “embarrassing” last year.
Clive Black, an analyst at Shore Capital, said Leighton had injected “new energy” but added that Asda needed “a proper overhaul of the group’s engine, not just a 12-month service”.
The supermarket faces additional pressure from looming cost increases across the industry.
In February, Leighton launched his first round of job cuts, restructuring senior teams to trim Asda’s headcount.
This led to the departure of 13 regional managers.
The supermarket also faced criticism from union chiefs over previous job cuts.
Late last year, Asda made hundreds of head office staff redundant without forewarning.
The GMB union said this was “not the right way for one of the UK’s largest private sector employers to handle job cuts of this scale”.
Asda is still hunting for a permanent chief executive.
The supermarket has been without a permanent CEO since Roger Burnley’s abrupt departure in August 2021.
Burnley left following a fallout over strategy with TDR Capital.
In January, Leighton relaunched the chief executive search after a failed effort by his predecessor, Lord Rose.
While the search continues, Leighton is serving as executive chairman.