Asda hits the brakes on tech tweaks to avoid festive fiasco

The UK's third-largest retailer has accelerated plans for a system freeze during the busy Christmas period as it grapples with a long-running tech divorce from its previous owner.

Since 2021, Asda's tech team has been engaged in a project to separate from US retail giant Walmart. Asda previously stated it was on track to complete the three-year separation project – dubbed Project Future – by the end of 2024 after extending its support arrangements with Walmart.

Asda has also been under some pressure after sales fell 6.4 percent year-on-year in the three months to August 10 and as its position as one of the big three UK supermarkets faces a challenge from Aldi.

In a communication seen by The Register, Rob Barnes, Asda VP of digital and technology, said the technology team was bringing forward a change freeze for the retailer's busiest period.

"We are now moving into a critical period, with Black Friday… and customers re-evaluating Asda ahead of the Christmas trading weeks, it is crucial that we maintain system stability over this period to make sure there is no disruption, and that we deliver the best possible experience for our customers and colleagues," he said.

"To achieve this, we are bringing forward our plans and instigating a change freeze with immediate effect that applies to all changes to our production environment, both business as usual and [Project] Future."

The statement said some system changes may be allowed. The change team is coordinating with all business unit heads to review requests and a moratorium process call will also take place daily to allow system heads to argue for their changes. All changes need to be reviewed, it said.

In September, UK tabloid The Sun claimed Asda was "hellbent" on introducing system changes to divorce from Walmart by the end of the year, during the "golden quarter."

Walmart sold Asda for £6.8 billion ($8.65 billion) in February 2021 to retail entrepreneurs Mohsin and Zuber Issa and private equity firm TDR Capital. The new owners entered a "transitional services agreement" with Walmart to support Asda's IT systems for an initial period of three years.

At the same time, Asda embarked on a program called Project Future to separate its IT systems from Walmart, with an initial budget of £189 million ($244 million).

Asda later extended its support arrangement with Walmart, and said it was on track to complete the three-year separation project by the end of 2024. In summer, some 135 IT staff entered a collective consultation to be transferred to outsourcer TCS while digital transformation chief Mark Simpson left the business after 28 years of service.

• Asda security chief replaced, retailer sheds jobs during Walmart tech divorce
• Mega supermarket spots stock discrepancy of tens of millions amid ERP system migration
• Sainsbury's bags a ticket to RISE with SAP, hoping not to trip like Asda
• Hangover from messy Walmart tech divorce ongoing at Asda

According to a spokesperson, Asda moved off Walmart's SAP ERP system to a new instance of S/4HANA hosted in the Microsoft Azure cloud in January 2024. In July, an annual report revealed the total cost of the Future digital transformation project had climbed to £430 million ($554 million) for the period ending December 31, 2023.

In September, the company said it would prioritize the conversion of its IT at around 850 retail sites, including smaller supermarkets and Asda Express convenience stores, during the remainder of 2024. The plan was for Asda to convert its larger stores from early January 2025 onward following the peak Christmas trading period.

Earlier this month, The Register learned that chief information security officer Simon Langley was exiting his role at the supermarket chain.

An Asda spokesperson told us in November 29: "We planned for a freeze for peak and this was built into our Future plans announced earlier this year and shared publicly. Like all retailers, we manage change very carefully around key trading events such as Black Friday, Cyber Monday etc., and the comms we sent this week was to make sure we were best positioned for [the] peak.

"New changes over this period are being minimized – business change leads will review changes to make a decision on whether they need to be actioned this side of peak trading – to ensure our stores and other operations are not dealing with any additional pressures over the Christmas period and can focus on serving our customers.

"We continue with implementation in some areas, last week we completed the changeover of all of our [automated petrol forecourt] sites for example, and further rollouts to some of our smaller stores and online operations remain under way." ®