Asda has confirmed that more than 10,000 of its managers will not receive their annual bonuses this year, following a worrying slide in performance at the once-thriving supermarket chain.
The payout cancellation comes amid Asda’s worst Christmas sales in a decade and a slip in market share from 13.7 per cent to 12.6 per cent, heaping pressure on the leadership team to reverse the retailer’s fortunes.
The bonus scheme’s suspension, revealed shortly before Asda is due to publish last year’s financial results, is expected to dampen morale among staff. One former senior employee warned that the setback would prove devastating, saying: “Morale will be rock bottom. Even Allan [Leighton] won’t be able to pick them up from this. This will mean some of the top talent looking elsewhere.” A recruiter added that the bonus cuts risk causing “anarchy” within the organisation.
Allan Leighton, who returned as executive chairman late last year after more than two decades away, is credited with transforming Asda into a retail powerhouse in the 1990s. He has pledged to restore what he calls the “Asda DNA”. However, recent figures reflect the scale of the challenge ahead: industry data from Kantar reveals a 5.2 per cent fall in sales in the 12 weeks to 28 January.
Leighton has already taken steps to reduce overheads, including a restructuring of senior teams that led to the departure of 13 regional managers in February. It follows the decision late last year to make hundreds of head office staff redundant, prompting condemnation from the GMB union over the way job cuts were handled.
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