Asda will transfer around 1,200 warehouse staff to parcel giant DHL as part of plans to outsource online fulfilment for its George clothing brand, a move the GMB union claims puts jobs at risk despite the supermarket's assurances that employee protections will apply.

The grocer currently processes George.com orders across depots in Lymedale, Brackmills and Washington, but proposes consolidating operations into a single DHL-run facility in Derby beginning January 2027. Asda disputed GMB characterisations of the plan, stating that all three existing sites will remain open to supply stores and that the proposal affects only online fulfilment, not clothing distribution for in-store sale.

The company said its George.com division processes more than 16 million orders annually and is expected to double in size by 2032, but existing facilities were not designed for such demand and will reach capacity within two years. Affected workers will transfer under TUPE regulations, which safeguard existing pay, pensions and service length, before becoming DHL employees.

GMB national officer Nadine Houghton warned that employees may refuse the new roles, effectively placing their positions in jeopardy. "In the Lymedale depot alone there are 14 couples with children whose entire household income relies on working there," she said.

The restructuring represents Asda's latest cost-cutting measure following a poor Christmas trading period. The grocer's market share fell to 11.4 per cent over the festive season, down from 12.6 per cent when executive chairman Allan Leighton returned in November 2024, with sales declining 4.2 per cent in the 12 weeks to 28 December – the only major supermarket to record a drop, according to the Telegraph.

David Lepley, Asda's chief supply chain officer, said the change supports ambitions for George to become Britain's largest clothing retailer by volume. "Any colleagues who transfer will do so under TUPE regulations, which protect their existing pay, pension and length of service," he said.

The GMB characterised the outsourcing as evidence of deeper structural changes under Asda's private equity ownership. Houghton said TDR Capital's 2021 buyout, alongside billionaire brothers Mohsin and Zuber Issa, "has been a disaster for workers, customers, the supply chain and communities".

The union pointed to separate job cuts announced a fortnight ago – more than 150 roles placed at risk following the Christmas collapse – and suggested the moves foreshadow a break-up of the business. TDR has been carving Asda into separate divisions including George and the Asda Express convenience chain.

Leighton rejected the speculation outright. "The suggestion that we are looking to break up the business is categorically untrue and, frankly, insulting to all our colleagues," he said.

Financial pressures continue mounting, with Asda's market share having plunged from 14.4 per cent when TDR completed its £6.8 billion acquisition in 2021. A €1.3 billion term loan issued by parent company Bellis Finco has fallen to 88 cents on the euro, down from near parity early last year, the Telegraph reported.

Leighton has previously acknowledged a turnaround could require up to five years, though he claimed in May there were "green shoots" of recovery despite 22 consecutive months of declining sales.

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