Asda reappoints Allan Leighton as executive chair to steer recovery.
- Leighton previously transformed Asda from insolvency to success in the 1990s.
- Asda grapples with declining market share and operational challenges.
- Leighton’s return raises hope and outlines potential strategies for revival.
- Expectations are high, but significant obstacles remain for Asda’s turnaround.
Asda has appointed Allan Leighton as its executive chair once again, succeeding Lord Stuart Rose. Leighton, who previously led Asda from 1996 to 2001, is credited with transforming the supermarket chain during his first tenure. This past success raises hopes for a similar revival as Asda currently struggles.
During the 1990s, Leighton was instrumental in pulling Asda back from the verge of insolvency and facilitating its £6.7 billion sale to Walmart in 1999. His past achievements with Archie Norman make his return particularly significant in the retail industry. Leighton is committing three to five years to this new role, acknowledging the time required for a successful turnaround.
Recently, Asda’s market share has further declined, dropping from 13.5% to 12.5%, with sales falling by 5.5% in the 12 weeks leading to 3 November. This decline marks a challenging period for the grocery giant. The challenges are compounded by changes in ownership, IT project setbacks, debt, job cuts, and an ongoing search for a new CEO.
Allan Leighton’s vast experience includes chairing the Co-op, Royal Mail, and several other major companies. Commentators like Steve Dresser see his return as a logical step due to his expertise in retail leadership. While some see him as a beacon for revitalisation, others note the substantial obstacles, such as morale and unclear value perception.
Retail consultant Nick Bubb emphasises that morale and a sense of purpose at Asda are crucial. The chain’s struggles with store standards and product ranges remain significant issues. However, improvements have been made to boost availability and customer experience. External factors, such as changes in tax, are adding to the complexities Leighton faces.
Berwick Partners’ Simon Walton expresses confidence that Leighton could turn around Asda, similar to his success at the Co-op. Nevertheless, the absence of a CEO is a central issue, and addressing this is a priority. The coming months, particularly post-Christmas, will be crucial in understanding If Asda can regain its footing under Leighton’s leadership.
Allan Leighton’s return to Asda brings optimism, yet the journey to restoration will require strategic focus and resilience amidst significant challenges.
