Dive Brief:
- Asda, the U.K. supermarket chain owned by Walmart, announced a massive restructuring of its operations as the grocer loses sales to deep-discounting rivals Aldi and Lidl.
- Asda said it will eliminate 1,360 middle-manager jobs, and then create 5,670 new, lower-paying roles throughout the company.
- The move comes just weeks after rival Morrisons announced it would slash 2,600 jobs and redeploy workers to its convenience-store operations.
Dive Insight:
Walmart and Asda portray the restructuring as a response to growing demand for online shopping. And it is true that Internet shopping is growing. But the driving force behind Asda's restructuring isn't the opportunity of the Web, it's the threat of the deep discounters from continental Europe.
Morrisons is looking to duplicate the model used by Germany-based Aldi and Lidl. Asda appears to be doing the same. Meanwhile Sainsbury is partnering with a Danish company to bring the Netto discount grocery brand back to England.