Asda has said Walmart remains “incredibly supportive” of its effort to extract itself from the US chain and former owner’s IT systems, after reports it will face millions in penalty fines for missing the initial February deadline for the mammoth IT project.
Asda’s ‘Project Future’ – dubbed Europe’s largest systems implementation programme – involves the separation of more than 2,500 systems from Walmart’s, including finance, checkouts, HR and payroll, CRM, depots and store picking.
Following the acquisition of Asda by the Issa brothers and TDR Capital from Walmart in 2021, the supermarket has been working to establish new systems and end its reliance on Walmart’s. The work had initially been expected to complete in February this year.
However, in September, Asda said it was taking a “pragmatic approach” to the delivery of Project Future, to “minimise any potential impact” on staff, customers and suppliers ahead of Christmas. This ‘change freeze’ meant planned migrations of systems from Walmart’s to Asda’s were cancelled, an insider told The Grocer.
The Grocer can reveal that more than 50 stores that had been scheduled to be switched over in recent weeks had been given a “no-go” order by Asda tech chiefs for work to proceed.
Asda’s IT woes have only been compounded by, according to a tech team insider, Project Future team members and contractors exiting the business. This comes after the supermarket made close to 500 head office job cuts in November, including its chief information security officer and chief data protection officer. A source said the planned mid-February deadline to end Asda and Walmart’s transition service agreement was now “entirely unachievable”.
The Telegraph reported on Saturday that if Asda was “unable to move to new systems before the looming deadline, it will face a penalty charge for continued use of Walmart’s technology”, citing industry sources that claim the charges “could quickly rise to millions of pounds”.
In an interview with the newspaper last year, Asda chairman Stuart Rose confirmed: “There is a tick-up which is an incentive for us to come off their system, but it’s not meaningful in the company’s profit and loss.
“At the end of the day, it is not £15m a week, but there is an incentive for us to finish this on time,” he added.
An Asda spokesman said the supermarket continued to “make good progress” delivering Project Future and had “successfully migrated large parts of our business to brand-new systems”.
“We will continue to take a pragmatic approach when delivering the remainder of the programme and Walmart continue to be incredibly supportive in every way in helping with the implementation,” the spokesman added.
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