In a significant development for the UK retail sector, supermarket giant Asda has revealed proposals that could place approximately 1,200 jobs at risk. This move is part of a major strategic shake-up aimed at outsourcing the delivery operations for its George clothing brand's online orders.
Details of the Distribution Overhaul
Asda plans to transition its distribution for George.com from its current in-house operations to logistics provider DHL, with the change scheduled to commence in January 2027. Currently, the online arm of the George brand is managed from depots located in Lymedale, Staffordshire; Brackmills, Northamptonshire; and Washington, Tyne and Wear. Under the new proposals, these operations would be relocated to a DHL site in Derby.
Impact on Staff and Operations
Asda has assured that all affected staff will have the opportunity to transfer to DHL under TUPE regulations, which safeguard their existing pay, pension entitlements, and length of service. The supermarket emphasised that its distribution sites will remain operational for in-store George purchases, and employees involved in distribution for other business segments at these locations will not be impacted by the changes.
David Lepley, Asda's chief supply chain officer, commented on the decision, stating: "This proposal supports the continued growth of our George.com business as we seek to achieve our ambition for George to become the UK's largest clothing retailer by volume." He added that the proposed transition is expected to begin in January 2027 and be fully completed later that year.
Broader Economic Context: Inflation Update
In related economic news, the UK has experienced a rise in inflation for the first time in six months. According to the latest data from the Office for National Statistics (ONS), the inflation rate increased to 3.4% in December. This uptick was primarily driven by higher prices for tobacco and airfares during the festive period.
The ONS highlighted that the December rise was linked to an increase in tobacco duty, which pushed up cigarette prices, alongside more expensive airfare costs over the Christmas and New Year holidays. Inflation measures how the prices of goods and services change over time, with monthly updates provided by the ONS to track economic trends.
This development underscores the ongoing challenges in the UK economy, affecting both employment in the retail sector and consumer spending power. Asda's restructuring efforts reflect a broader trend in the industry towards outsourcing and efficiency improvements, while the inflation data signals potential pressures on household budgets.
