Mohsin and Zuber Issa acquired Asda from Walmart in February 2021 in a highly leveraged £6.8 billion deal. Photo: Chris Hopper
The Issa brothers are still trying to separate Asda's IT systems from former owner Walmart, three years after buying the supermarket giant for £6.8bn.
Hundreds of staff have been hired to work on the migration, which has been dubbed “Project of the Future”.
The expected delays in the project mean Asda still has to pay Walmart to use its old IT systems, with some arguing that the aim is to stop using platform by the end of 2023 has not been achieved. .
A former Asda employee who left the business last year said “Asda must pay a fixed amount to [Walmart] for using the systems,” adding: “There is a penalty if they go beyond a certain date.”
However, a source close to the supermarket denied this, insisting it was “never intended” to complete the transfer before 2024.
Instead, it is understood that Asda expects to exit the Walmart System by the end of 2024. after which the business will move to the newly created IT platforms.
The source said: “As everyone knows, these projects are not implemented overnight.”
It is unclear how much Asda is still paying Walmart, but the costs of the migration threaten to add pressure to a balance sheet already saddled with billions of pounds of debt.
High debt levels have led to a flurry of cost cuts across the business over the past 18 months, leading to the sacking of disgruntled store managers.
Last week The Telegraph reported that Asda was testing a four-day week in an attempt to curb staff rebellion.
The continued reliance on Walmart's systems comes as sources close to Asda sought to criticize the US company's handling of the business prior to its sale.
Last week, a source close to the company said: “The current owners have invested heavily in business, which Walmart chose not to do in its final years of ownership – Asda was not their priority.”
When asked about IT migration, an Asda spokesperson said: “Project Future is a once-in-a-lifetime IT transformation generation and separates itself from Walmart's legacy systems. It will give Asda a market-leading and sophisticated platform.
“This project forms part of Asda's growth strategy and will enable it to make better use of data, improve the customer and colleague experience, and make the business more agile in responding to customer needs .”
Earlier this month, Asda appointed Matt Kelleher from Morrisons as its boss. a new chief digital officer who will lead Asda's technology functions until Project Future is completed.
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