Well, well, well. I just did a bit of delving to find out why someone had found the blog on the search term “why is UK productivity so low”, which had thrown up an article I’d pretty much forgotten I’d written. Maybe it’s a coincidence, but I mentioned Asda in that.
Then, browsing the BBC website, I found this article which says Asda is considering cutting up to 2,500 jobs.
Asda has two problems: 1) too many chiefs, and 2) most of them are incompetent.
I shop in Asda regularly, though I am increasingly having to complete my shop elsewhere because of the stock levels. My branch is open 24 hours, but its shelf stock does not match that detail in any way, shape, or form. Asda stocks up in the middle of the night and early morning, then that’s pretty much it until the next night. On top of that, they keep running “Rollback” offers on things, and haven’t cottoned on to the fact that this encourages the owners of corner shops to come in and buy everything up so they can resell it at the RRP in their own store. By 10am, the shelves are empty of those items. I’m also pretty sure some people buy some things on Rollback to sell on Ebay at the normal price.
That’s the thing about large retailers. They can buy at much better prices than smaller sellers can, and even their normal retail prices are better than you can find in the cash & carries. Beer is a prime example – Asda’s normal prices for a case of 12 bottles are £3 – £4 cheaper than the cash & carry offers, but when they put it on Rollback, it can be as much as £10 cheaper! When that happens, even pub owners go in and buy up stock. This Rollback discount problem also applies to many items in grocery, snacks, and confectionery.
Asda also has a problem with stock control. The amount of shelf space it gives to various products is fixed for long periods of time. So it doesn’t matter if they repeatedly sell out of one particular item (even a chimp would realise that’s because people want it), they will still maintain row after row of slower selling items, and maintain the 2 sq. ft. they allow for the item that is selling. Then, when they run out of warehouse stock, they will make no attempt to get anymore of that product until the next scheduled delivery – often weeks later. Management cannot see that if they held stock of things that sell, they would sell more of it.
Then there’s the Dairy items. I don’t piss about with low-fat stuff – if it’s got 50% less fat, it’s also got 50% less taste – yet they have shelf after shelf of that, whilst the normal-fat stuff sells out completely every day, and the shelves stay empty until the next midnight re-stock.
It’s no wonder that they’re struggling. And they’ll keep struggling until they start taking on managers who have a clue.