Asda is set for a strategic revival under Allan Leighton’s direction.
- Leighton acknowledges the process may take three to five years.
- A focus will be on restoring Asda’s core values, including price and availability.
- The search for a new CEO, possibly outside the retail sector, is underway.
- Alignment with shareholders on growth and strategy is crucial for success.
Allan Leighton, Asda’s former CEO, has returned to lead its transformation efforts, recognising that rejuvenating Asda’s position will span three to five years. His immediate focus is on reinstating Asda’s core strengths, particularly in terms of pricing and product availability. A key part of this revival strategy involves recruiting a new CEO who may not necessarily have a retail background but possesses an understanding of customer needs and effective management skills.
The commitment from Asda’s shareholders, including TDR Capital and Mohsin Issa, underpins this ambitious turnaround plan. Leighton confirmed their support, noting their shared vision for growth. He also pointed out the challenges Asda faces with its IT systems, which have lagged since their transition from Walmart’s infrastructure, leading to a loss in competitive advantage.
The supermarket’s recent quarterly performance has not met expectations, highlighted by a decline in sales by 5.5% and a diminished market share now at 12.5% according to Kantar data up to early November. To combat this, Asda is actively enhancing its customer offerings, improving product availability, and investing in value to uplift its competitive stance against rivals like Tesco and Sainsbury’s, as well as discount chains Aldi and Lidl.
Adding to Asda’s financial challenges, the company is bracing for a significant increase in its tax obligations following recent government budget changes. This comes as the supermarket continues to navigate the complexities of a highly competitive market environment since its 2020 acquisition by the Issa brothers and TDR for £6.8 billion.
Allan Leighton’s strategic leadership aims to navigate Asda through its current challenges towards a period of renewed growth and stability.
