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Asda is preparing to cut up to 1,200 warehouse jobs as part of an aggressive cost-cutting programme, according to the GMB, marking a second wave of proposed redundancies in little more than a fortnight.
Union officials claim the supermarket is planning to outsource distribution of its George clothing range to DHL, placing hundreds of roles at risk across several of Asda’s clothing depots. The work is expected to be consolidated at a single DHL-operated facility in Derby.
The affected sites are understood to include Lymedale, North East Clothing and Brackmills, although the depots themselves are expected to remain open. The move follows revelations last week that more than 150 jobs were at risk after Asda suffered a sharp slump in Christmas trading.
Nadine Houghton, national officer at the GMB, said the impact on families and communities would be severe.
“In the Lymedale depot alone there are 14 couples with children whose entire household income relies on working there,” she said. “GMB is clear: the private equity buyout of Asda has been a disaster for workers, customers, the supply chain and communities.
“The recent job cuts announcement and now the outsourcing of clothing distribution paves the way for a full carve-up of the company.”
Asda is under intense pressure to rein in costs after its share of the UK grocery market fell to a new low of 11.4 per cent over the festive period. Sales in the 12 weeks to December 28 fell by 4.2 per cent year-on-year, making Asda the only major supermarket to report a decline over Christmas and marking its 22nd consecutive month of falling sales.
The turmoil reflects the scale of the challenge facing Allan Leighton, who returned to the business in November 2024 to oversee a turnaround. Leighton has warned that a full recovery could take up to five years, although he said in May that there were “green shoots” of improvement.
Despite pledging to undercut rivals including Tesco and Sainsbury’s in a renewed price war, Asda’s market share has continued to slide, from 12.6 per cent when Leighton took the helm to 11.4 per cent today. That compares with a 14.4 per cent share in 2021, when the business was acquired by TDR Capital alongside billionaire brothers Mohsin Issa and Zuber Issa in a £6.8 billion deal.
TDR has been exploring ways to restructure the group, including separating out divisions such as George and Asda Express, its convenience store estate. The latest outsourcing move is seen by unions as part of that broader strategy.
Financial markets have also reacted nervously to Asda’s struggles. A €1.3 billion (£1.1 billion) term loan issued by its parent company, Bellis Finco, in 2024 has fallen to a record low of 88 cents on the euro, down from close to par early last year.
Despite the supermarket’s difficulties, filings at Companies House show that TDR’s 17 partners shared profits of £31.3 million in the year to April, a point seized upon by union leaders.
“Hard-working families and working-class communities should not see their livelihoods put at risk due to the business decisions of a handful of private equity executives,” Houghton said. “It is time for TDR Capital to come clean and be honest about their plan for the business, they owe it to every single Asda worker.”
