Asda to axe around 200 jobs

Asda employee stocking shelves. Asda recently announced plans to spend £750m on new sites this year. Photograph: Alamy

Asda is to cut around 200 jobs as it forges a new five-year plan to tackle increasing competition from rival supermarkets and discounters.

Head office staff in Leeds and the Leicestershire market town of Lutterworth, where its clothing arm, George is based, were briefed on the plans on Monday.

The moves were part of a package of recommendations put forward by consultancy firm McKinsey, which also included calls for a widening of product ranges.

An Asda spokeswoman said: "In the spirit of openness, we've let our colleagues know that we will be having some more detailed discussions with them this week about a new structure."

The company declined to comment on details of the redundancy plan.

Under pressure from upmarket rivals such as Waitrose at one end and discount chains such as Aldi at the other, recent figures for the 12 weeks to 2 March show Sainsbury's was the only one of the big four supermarkets not to lose market share over the year, holding steady at 17%.

Tesco fell 0.6% to 28.7%, Asda by 0.3% to 17.5%, and Morrisons dropped 3.2% to 11.1%.

But, in contrast with the rest of the big four, Asda recently announced plans to step up its store expansion and spend £750m on new sites this year to plug gaps in London and the south-east of England.

The expansion drive would see the UK's second-largest supermarket, which is owned by US-based Wal-Mart, add 500,000 sq ft of new space, compared with 350,000 sq ft in 2013.

Its competitors have been scaling back from the so-called "space race", as they focus on smaller convenience stores and their online businesses