Asda Group Ltd. said Wednesday it will create more than 7,000 jobs this year, increasing its work force by about 4.2%, as part of the U.K. budget supermarket chain's store expansion plan.

Asda is the latest U.K. supermarket group to announce a recruitment drive as nonfood retailers are placed in administration and layoff staff. Unemployment is rising in the U.K. due to the credit crunch and economic downturn.

Grocers, discounters and online players in the U.K. have fared better than the broader retail industry during the economic downturn, while sellers of furniture, clothing and electrical goods have been hit the hardest.

Asda - a wholly-owned subsidiary of Wal-Mart Stores Inc. (WMT) of the U.S. - operates 365 stores across the country and has a work force of 165,000 people. Asda will create 3,700 jobs in the U.K. with the opening of nine food stores, five Living outlets and extensions to 15 existing stores.

Some 2,000 jobs will be created through the expansion of its home shopping business Asda.com, and a further 1,000 jobs through organic growth. Asda will also continue to invest in its specialty business by creating 120 new roles in Asda pharmacies and optical centers.

In addition, Asda will recruit up to 3,000 long-term unemployed for existing vacancies.

"Our track record of recruiting and retaining people is second to none, which is why we have the lowest turnover and most motivated workforce in British retail," Andy Bond, president and chief executive of Asda, said.

Tesco -the U.K.'s biggest retailer by sales - recently said it plans to create between 8,000 and 10,000 jobs in the U.K. this year. Rivals William Morrison Supermarkets PLC (MRW.LN) and J Sainsbury PLC (SBRY.LN) will create more than 5,000 and 4,000 jobs, respectively.

And no-frills general-merchandise retailer Poundland PLC plans to create more than 1,000 jobs in 2009 as a result of the opening of 30 new stores.

Food, clothing and housewares retailer Marks & Spencer Group PLC (MKS.LN) plans to cut 1,230 jobs and close 27 stores as part of its cost-cutting plans.

About 27,000 jobs were lost as a result of the demise of Woolworths Group PLC after its administrator failed to find a buyer for the general-merchandise retailer. DVD, CD and videogames retailer Zavvi U.K., which is also in administration, has also fired staff.

Company Web site: www.asda.co.uk

-By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; lilly.vitorovich@dowjones.com

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