A leading retail expert has said Asda boss Allan Leighton is “fully justified” in not shelling out a bonus to Asda managers, after its disastrous results in the past year.
Asda has declined to comment on reports that thousands of workers will not receive their annual bonus.
The Telegraph reported more than 10,000 managers have been told they will not receive their expected rewards because of its poor financial performance.
The supermarket’s market share has slumped from 13.7% to 12.6%, whilst it was also the worst-performing of the major food retailers over Christmas.
Leighton returned to Asda in November, taking over from Lord Stuart Rose as executive chairman, having achieved legendary status for his leadership of the retailer in the 1990s alongside Archie Norman.
Last month he launched a major round of price cuts with a return to Asda’s Rollback campaign, which saw 4,000 price cuts backed by a heavyweight marketing push.
Leighton has vowed to win back the “hard-working families” that have deserted the supermarket in their droves, and has set out to “restore the Asda DNA”.
However, experts have warned one of his key challenges will be to lower prices while boosting staff morale, and some sources have claimed the decision to withhold the bonus will make it harder for Asda to attract talent.
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The Telegraph reported a former senior Asda employee as saying Leighton’s latest move would leave morale at “rock bottom”.
“Even Allan won’t be able to pick them up from this,” the source said. ”This will mean some of the top talent looking elsewhere.”
However, Retail Mind founder Ged Futter, a former senior buying manager at the retailer, told The Grocer: “Leighton would be fully justified in not handing out bonuses due to Asda’s shocking performance.
“A bonus is called a bonus for a reason,” said Futter. “You give a bonus to reward people because they have performed well.
“When I was at Asda there were plenty of years when we didn’t deserve it, because we hadn’t hit our targets. It’s not a guaranteed bonus. This is not taking money away from pay.”
Futter said he believed there would not be lasting damage to Leighton’s bid to boost morale, with forthcoming announcements regarding staff pay likely to be more important.
“This is a non-story to my mind, rather than some sort of PR disaster. As a CEO you get more bad PR for rewarding people for failure.
“I have no doubt people are working hard but that doesn’t give you a right to a bonus when the business is performing badly.”
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