Asda, the UK's third-largest supermarket chain, is facing significant challenges with its George clothing line due to a recent IT system upgrade. The upgrade, part of an £800 million transformation project called Project Future, has resulted in widespread order disruptions, affecting thousands of customers.
The issues stem from an attempt to upgrade George's online system earlier this month. Customers have reported various problems, including money being taken without orders being processed, difficulties in returning items purchased online, and a lack of communication regarding order statuses. These disruptions have been particularly problematic for parents attempting to purchase school uniforms for the upcoming academic year.
An Asda employee, speaking anonymously, revealed that up to 7,000 George orders were affected by the IT meltdown. The timing of the upgrade has been criticized, as it coincided with one of George's busiest sales periods. This decision has been attributed to poor management planning, given the critical nature of timely deliveries for items such as school uniforms and holiday clothing.
The George clothing brand, launched in 1990, has been a significant asset for Asda, consistently performing well even during challenging times for the company. In the second quarter of 2024, George reported a 3.9% increase in clothing revenues. However, this recent IT debacle threatens to undermine the brand's success.
Mohsin Issa, co-owner of Asda, is overseeing Project Future, which aims to replace numerous computer systems previously operated by Walmart. This IT upgrade is part of a larger transformation effort following the acquisition of Asda by the Issa brothers in 2021 for £6.8 billion.
"As part of building a bigger and better Asda, we are delivering Europe's largest IT transformation, involving the separation and upgrade of over 2,500 systems from Walmart. We sincerely apologise for this and any inconvenience caused and are working hard to resolve them as quickly as possible."
The IT issues at George are not isolated incidents within Project Future. Earlier this year, a payroll software update left thousands of Asda staff without correct wages, further highlighting the challenges faced during this extensive transformation process.
These setbacks come at a critical time for Asda, as the company has seen a decline in market share from 14.8% at the time of acquisition to 12.7% in July 2024. The pressure on Mohsin Issa to improve the company's performance has intensified, with Asda's chairman, Lord Rose, urging him to step back from day-to-day operations.
As Asda works to resolve these IT problems, the company faces the challenge of maintaining customer trust and reversing its market share decline. The success of Project Future remains crucial for Asda's turnaround plans, despite the recent setbacks.