Reviving Asda’s fortunes could take three to five years, according to Allan Leighton, the supermarket’s former CEO who has returned to drive its turnaround efforts.
Speaking with The Guardian, Leighton, who took over the role from Lord Stuart Rose yesterday (25 November), said his initial priority would be to “restore Asda’s DNA”, including making improvements to price and availability, and hiring a new CEO.
Leighton is set to create a revival plan for the business by the end of January, and said he was looking for a “really good leader” who may not necessarily be a retailer but who understood shoppers and managing people.
He will be spending three to five years with the supermarket chain, acknowledging that “it is going to take us that long to get it right.”
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He said Asda’s shareholders – private equity firm TDR Capital, petrol forecourts entrepreneur Mohsin Issa – were completely aligned with his belief that the retailer “has to grow” and he was “confident I have the support in this” from them.
He noted that while Asda had a strong chain of stores, it needed to address its IT challenges, which arose after moving off former owner Walmart’s systems, resulting in the loss of “significant competitive advantage.”
Earlier this month, the grocer reported a drop in quarterly sales and warned of a £100m spike in its tax bill following changes announced in the government’s latest budget.
The group, which was sold to the Issa brothers and TDR for £6.8bn in 2020 by Walmart, has been busy making improvements for customers in recent months in a bid to revive its poor sales. This includes boosting availability, enhancing the customer experience, and investing in value.
Since its takeover, Asda has struggled to compete on both price and service. Bigger rivals Tesco and Sainsbury’s have been gaining ground alongside the fast-growing discounters Aldi and Lidl.
According to the latest data from Kantar, Asda was one of only two leading grocers to experience a drop in sales and market share for the 12 weeks to 3 November, as sales at the supermarket fell 5.5%, with its share of the market down one percentage point to 12.5%.
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