
Asda has begun 2025 in the way that no retailer wants to – reporting its worst Christmas since 2015, as well as a series of redundancies across the business.
The grocery giant saw sales slump 5.8% during the 12 weeks to 29 December, according to Kantar.
It also axed roles for 13 regional managers following the results, as part of a shake-up designed to cut headcount and improve performance.
These latest redundancies come shortly after the grocer made a host of job cuts in its head office in November, and warned there would be further redundancies to come in 2025.
What’s more, earlier in January, it was reported that the business risked a multimillion-pound fine over its delayed IT upgrade plans, as fears grew it would miss its February deadline to complete the £800m overhaul off of former owner Walmart’s technology systems.
Against this backdrop, and without a CEO in place, it would be easy to assume Asda’s prognosis for the year ahead would be pure doom and gloom.
But Asda-returner and executive chairman Allan Leighton has made some early indications of how he plans to restore the beleaguered supermarket chain’s performance, and return the grocer to its former glory.
As well as appointing a host of former Asda executives to new roles to bolster the retailer’s leadership war chest, Leighton has spearheaded the reintroduction of Rollback and Asda Price – down to the once-iconic pocket tap from the supermarket’s heyday.
But will the tactics that worked for Asda in its prime also ignite its turnaround – or does the chain need new answers for new problems as it seeks to recover sales and market share in a rapidly evolving grocery market?
Reigniting Asda’s former culture
Speaking to staff at Asda House in November, Leighton said his three priorities were restoring Asda’s “DNA” on price and ways of working, improving availability, and appointing a long-awaited CEO.
Alongside the re-introduction of Rollback, Leighton has sought to inject Asda’s DNA by widening the roles of some of its executives, such as Liz Evans, as well as reintroducing a slew of familiar faces to the company, including Ade McKeon, Gemma Lightbody, Matt Shields, and David Lepley.
McKeon is re-joining the grocer as vice president for ambient, having previously served as its brand director, while Lightbody rejoins as business unit director for impulse grocery, formerly serving as its senior buying manager for beauty and toiletries.
Meanwhile, Shields re-joins as business unit director for core grocery, while Lepley will take on the position of chief supply chain officer, previously serving as its vice president for online grocery operations.
Clarity managing partner Fran Minogue believes that getting these appointments in place ahead of the introduction of Asda’s Rollback scheme is a canny move.
“The quickest way [for Leighton] to communicate his vision and get the right price proposition in place is to surround himself with people who were part of it first time around,” she says.
Retail Economics CEO Richard Lim concurs, and argues Asda will “really benefit” from “that experience coming back into the business” as well as “some consistency in leadership” as it looks to drive home its value proposition.
Minogue adds that bringing back people who know the organisation means “they know how to get things done” so they are “more likely to hit the ground running”.
“A strong culture is central to the success of any business and will certainly be a key ingredient in the turnaround of Asda,” she says.
However, she notes: “It has been 25 years since Alan and Archie led the charge and during that time markets and consumers have changed and the competition hasn’t stood still.
“Rallying the troops behind a common goal will be critical, but it’s not going to work in isolation.”
Former Asda CEO, Roger Burnley
The appointments arrive as Asda is still seeking its long-awaited CEO.
The grocery giant has been without a chief executive since Roger Burnley left in August 2021, and Leighton this week reignited the retailer’s search for a new boss.
The chair is thought to be looking for someone he can work alongside, rather than oversee, according to The Telegraph.
While Lim is not sure the reintroduction of former alumni signals anything towards what kind of CEO Asda is looking for, he says it probably “nods towards the fact they wanted to bring in some experienced hands that know the business to steady the ship” while they attempt to co-pilot a turnaround of the retailer.
Are more Project Future mishaps on the way?
Another major setback on Asda’s road to recovery has been the tumultuous delivery of its IT overhaul, Project Future, which aims to separate its tech systems from those used by its former majority owner, Walmart.
The retailer faces the threat of a multimillion-pound penalty from Walmart if it does not move off its tech systems, as fears grow that it will miss its February deadline to complete the £800m IT revamp. The grocery giant has already encountered tech trouble in this transaction, impacting payroll and customer orders.
With the project already plagued with issues, it raises the question of whether more tech mishaps and mounting expenses are inevitable for the business.
After losing key members of its IT team during a series of November job cuts, strategic consultant Miya Knights argues that Asda needs to hire “data, data security, and IT governance experts” to have the right team in place to complete its tech transformation project on schedule.
She says Asda can balance time and cost pressures of using Walmart’s tech with ensuring its replacement is sufficient by “taking a phased approach to the switchover and ensuring failsafe and rollback processes are built into the project’s business continuity and disaster recovery governance”.
Knights says that Asda may also “seek specialist external help at a strategic and process level or in specialist areas of IT governance” in a bid to meet Walmart’s IT transfer deadline.
“One would imagine it would need juicy ‘on time and budget’ deliverable incentives to make it affordable for the grocer and worthwhile for the provider though,” she warns.
Addressing long-term challenges
While Asda has lost momentum, its rivals have been gaining ground. Discounter Aldi poses the most major threat to the supermarket, with GlobalData reporting it is set to overtake Asda as the UK’s third biggest grocer as soon as 2028, based on both companies current trajectories.
This piles yet more pressure on Asda’s turnaround, which Leighton says “could take 3-5 years”.
As the grocery giant heads into another year, what levers should it be pulling to enable it to see off the German discounter and win back market share in the years to come?
Lim is optimistic for the chain and thinks a recovery is possible, but that it requires a “strong vision, strong leadership, and a strategy that they can really have a laser-like focus on.”
However, he warns that Asda’s “long-term decline”, coupled with “the waves of rising costs” impacting the sector at large will mean the grocer will inevitably “be looking to cut costs significantly.”
“This is likely to come in the form of job losses in stores and across middle management in order to inject more resilience into the business,” he adds.
GlobalData senior analyst Eleanor Simpson-Gould believes that, in the year ahead, Asda must focus on strengthening its online capabilities in order to “re-establish itself as a dominant player in the market”.
She adds that addressing “reputational issues and restoring consumer trust and interest” will be vital for the grocer in the year ahead.
Bringing back familiar branding like the pocket tap, and a clear focus on value through Rollback, will go some way to address this. But if Leighton wants to make Asda fit for the future, coupling familiar tactics with innovation and investment will be crucial.
Click here to sign up to Retail Gazette‘s free daily email newsletter