Should Asda fail to complete its IT overhaul by February, the UK supermarket could face a "multi-million pound" fine.

As reported by The Telegraph, concerns are rising that Asda may not complete its IT upgrade by the February deadline. Citing "industry sources," The Telegraph reports that the fine it could receive would be in the multi-millions.

Asda has been seeking to upgrade and sever its IT systems from Walmart since Walmart sold the company in February 2021 for £6.8 billion ($8.2bn) to Mohsin Issa, Zuber Issa, and private equity firm TDR Capital.

As part of that sale, Walmart agreed to support Asda's IT systems for a period of three years.

Asda is drawing to the end of that three-year transition period and the severance project (dubbed Project Future and covering everything from ERP to HR systems and more) had cost the retailer £430 million ($520m) by the end of 2023. The Telegraph report suggests this has since grown to around £800m ($975.5m).

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 program and Walmart continue to be incredibly supportive in every way in helping with the implementation.”

In December of last year, Asda delayed the IT upgrade of some of its smaller stores due to the holiday peak trading period. A spokesperson at the time said: "We are focusing on ensuring that any outstanding fixes are complete to ensure that we are not placing any additional pressure on our store teams when we transition to the new systems, and that when we move to larger scale rollout in the new year we are well positioned having had longer to work with the existing pilot stores and those sites which have already completed the transition."

The latest report from The Telegraph quotes one employee as having said: “Everyone you talk to is saying that Asda is not going to meet the deadline. IT and Asda don’t mix.”

In an August 2024 interview with The Telegraph, Asda co-chief executive Lord Stuart Rose acknowledged there would be a fine should the company not meet its deadline, though denied that it would be the £15m ($18.29m) per week which had been speculated by industry sources.

Despite the cost, Lord Rose stated that the company would opt to pay the fees if it meant a smoother transition.

Asda is required to repay Walmart £900m ($1.1bn) by 2028 in debt – made up of a £500m ($609.5m) stake plus £400m ($487.6m) of interest.

Following its departure from Walmart, Asda has remained a customer of Microsoft. Walmart notably signed an agreement with Microsoft Azure in 2018. Asda moved off of Walmart's SAP ERP system to a new instance of S/4HANA hosted in the Microsoft Azure cloud in January 2024.

In 2022, Asda selected Veeam's Availability Suite for backup and restoration for its mission-critical services.