Asda risks fine over IT upgrade delays
Alongside relying on Walmart’s IT system, Asda must also meet a £900m repayment to Walmart’s former owner by 2028
Asda is reportedly facing a potential multimillion-pound fine for failing to complete an £800m IT upgrade by next month, according to the Telegraph.
The new system, which has been championed by Mohsin Issa, attempts to detach the supermarket’s technology systems from those used by former owner Walmart, and is known as Project Future.
The Telegraph has learnt that if the supermarket does not move to new systems before the deadline, it will be penalised for the continuous use of Walmart’s technology. Industry sources have suggested that these charges could rise to millions of pounds.
Despite setting a deadline to complete the changeover by February, internal sources have warned that delays are likely.
This is not the first time Project Future has had issues. In March, a software update caused payment errors, leaving tens of thousands of workers underpaid, with some losing hundreds of pounds.
A few weeks later, another IT glitch impacted Asda’s George clothing line, disrupting thousands of orders. Customers reported paying for items but not receiving their deliveries.
Launched three years ago, the Project Future was deemed “mission critical” to Asda’s turnaround plan and prioritised by Mohsin Issa, who stepped back from day-to-day operations in September.
Control was then handed to Lord Rose, who acknowledged the Walmart penalty charge in an interview but denied claims that it could reach £15m a week.
At the time, Rose said: “There is a tick-up which is an incentive for us to come off their system, but it’s not meaningful in the company’s profit and loss. At the end of the day, it is not £15m a week, but there is an incentive for us to finish this on time.”
Alongside relying on Walmart’s IT system, Asda must also meet a £900m repayment to Walmart’s former owner by 2028.
An Asda spokesperson said: “We continue to make good progress delivering Project Future and have successfully migrated large parts of our business to brand-new systems. We will continue to take a pragmatic approach when delivering the remainder of the programme and Walmart continue to be incredibly supportive in every way in helping with the implementation.”
