Asda has brought back its former CEO Allan Leighton as its executive chair, succeeding Lord Stuart Rose, in a bid to turn around the struggling chain.
Leighton helmed Asda from 1996 to 2001 and is credited with turning around the struggling chain, alongside current M&S chair Archie Norman – pulling the grocer from the brink of insolvency to orchestrating its bumper £6.7bn sale to Walmart in 1999.
However, Leighton certainly has his work cut out for him this time around, as the struggling supermarket continues to flounder.
He told The Guardian that he had committed to spending three to five years with the supermarket chain, acknowledging that “it is going to take us that long to get it right.”
Earlier this month, Asda’s market share tumbled further, dropping one percentage point from 13.5% to 12.5% as sales fell 5.5% in the 12 weeks to 3 November.
The grocery giant is also battling a host of issues including changes in ownership, setbacks from its IT transformation project Project Future, huge debt piles, job cuts, and its longstanding, and so far fruitless, search to for a new CEO.
Who is Allan Leighton?
Following his previous stint at Asda Leighton was chair of the Co-op from 2015 to 2024 – and has previously chaired the boards of Royal Mail and the Canal and River Trust. He is currently chair of Brewdog, Pizza Express and European fashion chain C&A.
Commenting on Leighton’s return to the supermarket giant, Grocery Insight CEO Steve Dresser notes: “I don’t think anyone could have foreseen it. But it makes perfect sense to everyone involved in the retail space.
“Everyone wondered whether his going plural work would ever see him return to the food retail space- the time now feels absolutely right.”
“Old skills and techniques still work”
His experience is undeniable – but it has been a long time since Leighton was at the forefront of Asda’s operations, and the retail veteran set to face a whole new host of challenges.
Despite this, Dresser points out: “Archie Norman has driven a turnaround at M&S so it’s obvious with that turnaround that the old skills and techniques still work in modern day retailing.
“The major challenges are things that he will be able to fix – morale, sense of purpose and belonging alongside an unclear value perception. 
“Shops have lost their verve and reason for being. All of these things can be fixed quickly with leadership.”
Retail consultant Nick Bubb argues: “Allan’s great strength 25 years ago was in ‘rallying the troops’ at store level, and he will clearly be able to help in improving staff morale.
“But Asda’s problems go deeper than that and they still have a long way to go on improving store standards and range quality, as well as bedding in the new IT systems and convenience store business.”
Although the grocer has been busy making improvements for shoppers in recent months in efforts to revive sales, including boosting availability and enhancing customer experience, the chain still reported a drop in quarterly sales earlier this month.
It also warned of a £100m spike in its tax bill following changes announced in the government’s latest budget.
However, Berwick Partners partner head of consumer practice Simon Walton, believes Leighton can successfully turn around Asda again, noting he has also done the “same thing at the Co-op” more recently.
“I don’t think there’s any question that he can do it. He’s a very different person to Stuart [Rose], but the bigger issue here is that they still can’t hire a chief exec.
“It’s interesting they’ve had to bring in another executive chairman because they can’t solve the real problem.”
Dresser agrees that the supermarket’s search for a new chief exec remains its biggest priority.
“The next top priority is to assimilate the situation over Christmas and potentially have a plan post his first 90 days,” he adds.
Is Leighton the right fit for the job?
In terms of any weaknesses Leighton may have going into the role, Dresser says: “Everyone has blind spots but the team incoming are critical. Archie didn’t do it on his own [at M&S], nor can Allan.”
But Dresser believes Leighton’s return could trigger an appetite to aid in the turnaround mission from former Asda leaders.
“Good people will come in, even the old guard to restore it to glory, because they have a leader they can get on board with,” he says.
With Asda facing a difficult road ahead and rivals such as Sainsbury’s and Tesco “doing a really good job,” Walton argues that it is “a hell of a job” to turn the supermarket around.
Despite this, Shore Capital director Clive Black labelled Leighton’s return to Asda chair as “a smart move.”
“We’ll soon find out [if he can lead a successful turnaround]”, he notes, “it’s not an easy one, for sure, but he has a lot about him and supportive owners.”
Despite stellar credentials, Leighton certainly has his work cut out for him as he steps up to the helm once again.
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