Asda, the UK’s third largest supermarket, is facing challenges as it navigates its £1 billion ($1.31 billion) tech divorce from US retail giant Walmart. The departure of key figures behind this massive endeavor, Carl Dawson (Asda’s CIO) and Rob Barnes (VP of digital and technology), has set the stage for a significant transition within the company.
The journey towards separation began in February 2021 when Asda was sold by Walmart to retail entrepreneurs Mohsin and Zuber Issa and private equity firm TDR Capital for £6.8 billion ($8.9 billion). Following this transaction, Asda entered into a transitional services agreement with Walmart to provide support for inherited IT systems for an initial three-year period. Subsequently, Project Future was initiated to develop separate systems encompassing ERP, HR, security, and store operations, with an initial budget of £189 million ($247 million).
However, the road to independence has not been smooth sailing for Asda. The completion of Project Future has faced delays, with a projected finish date pushed back to at least the third quarter of 2025. Despite the challenges, Asda remains committed to creating standalone systems and reducing reliance on Walmart’s support.
The recent departures of Dawson and Barnes signal a shift in Asda’s digital leadership team as Project Future nears its conclusion. Technology director Marcus Shaw is slated to take on the role of CIO, with Adrian Berry continuing as CTO. Additionally, new talent is set to join the team, with David Devany from Iceland Foods becoming the VP of eCommerce and digital business, and Barney Burgess assuming the role of VP food online and chief analytics officer.
As the company moves towards the final stages of Project Future, costs associated with the tech divorce are expected to decrease. Asda anticipates spending £175 million ($229 million) on separate store and enterprise IT systems in 2025, significantly lower than the projected total costs of £800 million ($1 billion) shared at a meeting last year. The company also foresees a substantial reduction in annual costs compared to previous years, marking a positive step towards operational efficiency.
In its transition away from Walmart’s IT infrastructure, Asda migrated to a new instance of S/4HANA hosted in the Microsoft Azure cloud in January 2024. The company has focused on converting IT systems at 850 retail sites, with larger stores undergoing the transition in early 2025 following the holiday season. Despite some delays in the tech transition of certain stores, Asda remains committed to completing the process and achieving independence from Walmart.
As Asda navigates the complexities of its tech divorce, the company is positioning itself for a future marked by enhanced digital capabilities and operational efficiency. The departure of key executives marks a pivotal moment in Asda’s journey towards independence and sets the stage for a new era of growth and innovation in the UK retail landscape.