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Bloomberg reports that "slumping sales at Wal-Mart Stores Inc.’s Asda supermarket chain have been accompanied by thousands of job cuts that analysts say may help explain the U.K. grocer’s declining fortunes."

The story goes on to say that "the average number of workers in Asda’s retail and distribution facilities fell by 5 percent to 107,740 in 2015, according to company accounts filed this week. That’s even as the chain opened 37 new stores. Following the cuts, Asda’s sales have progressively worsened. Same-store revenue -- a key barometer of a retailer’s performance -- tumbled a record 7.5 percent in the second quarter of this year."

Bloomberg writes that "last year’s headcount reduction was mainly due to the grocer not replacing some workers when they left, a spokeswoman said by e-mail. The contraction is in contrast to the company’s main rivals. Market leader Tesco Plc put more staff on shop floors, helping its sales to stabilize as Asda’s worsened."
KC's View:
At some level, this can be blamed on the damage that discounters Aldi and Lidl have done in the marketplace, which has forced a lot of retailers to engage in cost cutting as a way of dropping prices. The problem has been that it hasn't worked. Which is one of the reasons that Tesco - a company dealing with its own issues, trying to emerge from accounting scandals, lousy performance and now the charging of three former execs with accounting misdeeds - has decided that to compete, it has to invest ... in people, as well as real estate. They're trying to differentiate, not conform.

US retailers should take note.