Asda strike will cost it millions, says former executive

Click to follow
The Independent Online

Asda's rearguard action to limit the damage wrought by the five-day strike due to start on Friday will cost the group a substantial "seven-figure" sum, a former Asda executive has warned.

The supermarket chain, which is part of the US group Wal-Mart, will incur the bill regardless of whether the strike organised by the GMB general union goes ahead. The costs will cover building up an excess stock of products with long shelf lives at the back of its stores before Friday's strike.

To avoid having gaps on its shelves - and risk driving its own customers away to a rival - Asda will use the nine of its 24 depots that are not unionised to divert volumes to stores outside their usual catchment zones, the former executive predicted. Asda, which is run by Andy Bond, will also press its suppliers, particularly of fresh food and produce, to make deliveries direct to its stores, for which it will have to pay extra.

Bigger fuel bills and overtime salaries will increase the total cost of Asda's attempt to mitigate the impact of one of the most prolonged stoppages in recent industrial history.

"Moving volumes is less emotive than moving people, so Asda will direct stores to be serviced by different distribution centres," the former director predicted. "I think they will be reasonably confident about riding out the impact of the strike," he added.

Asda is trying to avert the strike by taking legal action against the GMB. Today it intends to apply for an injunction to stop thousands of workers walking out. Its case is based on allegations of major irregularities in the union's strike vote, which meant that ex-Asda employees were balloted.

A five-day strike, timed to coincide with England's World Cup quarter-final, is expected to hit the pay packets of those who walk out twice over. They will lose pay on the days off work and also potentially miss out on their annual bonus, which is linked to how much profit each distribution centre makes, the former executive warned.

Comments