Supermarkets led by Wal-Mart’s Asda have set out plans to create thousands of jobs as the UK’s food retailers show they are weathering the economic storm better than their non-food counterparts.
Asda, the country’s second-biggest supermarket group, said it would create 7,000 jobs this year – in line with expectations – with nine new food stores, five new “Living” stores selling furniture and homewares, and a number of extensions to existing sites.
Andy Bond, chief executive of Asda, said: “This year we will create 7,000 new jobs at a time when many companies are having to lay people off.”
The chain said it would use local employment partnerships, which are joint ventures with the government, and Remploy, a recruitment agency for the disabled, to try to fill 3,000 existing roles.
Tesco, the UK’s biggest supermarket chain, followed quickly with its own job creation announcement, adding up to 10,000 new jobs over the next financial year.
James Purnell, work and pensions secretary, welcomed the moves from both supermarkets.
Meanwhile, J Sainsbury, the third-biggest supermarket chain, said it was adding 5,000 jobs as set out at its trading update this month.
However, Sainsbury is also looking to cut some 200 jobs from its head office.
Wm Morrison, the final of the “big four” supermarkets, has said it will create 5,000 jobs.
The significant tally of possible new jobs is still small compared with the vast number of redundancies already seen in the retail sector and tiny in comparison with jobs lost across the UK economy as a whole.
The collapse of Woolworths at the end of last year has led to about 30,000 redundancies across the country, while the failures of MFI, Zavvi and a slew of smaller retailers have made thousands more redundant.
Supermarkets have been put under pressure in the consumer downturn but are performing much better than most non-food retailers, which are more likely to sell discretionary products such as electronic goods or “high-ticket” items such as furniture.
Asda’s decision to open more Living stores will be seen as a vote of confidence in the format, whose success was in doubt.
Its plan for new store openings is more modest than in recent years, although the target for new jobs is ahead of last year’s 6,000.
Some of the new jobs will come at Asda.com, the supermarket’s online division.
Parent company set for expansion
Wal-Mart’s Asda business is not the only part of the global retailer planning expansion this year, writes Jonathan Birchall.
In Brazil, Wal-Mart will invest more than $1bn (£698m) to add 80 to 90 new stores and create 9,000 jobs; in China, it will continue to add new stores in smaller, second-tier cities; in Canada it is converting its discount stores to more profitable, grocery-selling Supercenters.
Meanwhile, earlier this month it finalised a $2.6bn deal for a controlling stake in D&S, Chile’s largest retailer.
In fact, Wal-Mart will for the first time create more new store space internationally than in its home market in the US, with an additional 19m to 20m sq ft in formats ranging from 5,000 new bodegas in Mexico to a new Sam’s Club discount warehouse in Shanghai.
UK retailer Tesco, by comparison, plans to add about 11.5m sq ft internationally this year.
Mike Duke, who takes over as chief executive from Lee Scott next week, argued in October last year that the gathering economic crisis had strengthened the international appeal of Wal-Mart’s low-cost brands.
“We are well positioned because of price leadership, because of this focus on being the low price ... that customers need at this point in time,” he said.

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