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City grandee Stuart Rose has been replaced as Asda’s executive chair by Allan Leighton as the UK’s third-largest supermarket chain grapples with an IT overhaul and dwindling sales.
Rose, who has served as chair since 2021, took day-to-day responsibility for leading the grocer in September, alongside Rob Hattrell, an executive at TDR, the private equity firm that owns a majority stake in Asda, after co-owner Mohsin Issa stepped down.
The 75-year-old Rose will remain on the board “to ensure an orderly transition before stepping down”, the company said on Saturday.
Leighton, 71, was chief executive of Asda from 1996 to 2001 and chaired rival grocer the Co-op for nine years, among his other senior roles. He said he was “delighted to be returning to the business”, and that the “potential for Asda now is significant”.
The group, which was sold to the Issa brothers and TDR in a £6.8bn deal in 2020 by US owner Walmart, has been struggling with product availability issues, store cleanliness and poor customer experience in recent months.
It has lost market share and posted a 2.5 per cent decline in total revenues, excluding fuel, for the quarter ending September 30, with a 4.8 per cent drop in like-for-like sales.
The company also warned that it faced a £100mn hit from the Budget because of changes to employers’ national insurance contributions, and recently cut about 500 jobs at its head office.
Asda has had to disentangle its IT system from Walmart’s, which has contributed to problems with payroll and online orders. TDR’s Hattrell has insisted that Asda had almost completed the costly and complex exercise.
Leighton is credited with turning around Asda in the late 1990s alongside Archie Norman, now M&S’s chair, and orchestrating the chain’s sale to Walmart.
He told the Financial Times on Saturday that the supermarket “had to go ‘back to the future’ but with modernity”, referring to a need to refocus on Asda’s value credentials.
The supermarket will continue its protracted search for a chief executive under Leighton.
Rose, according to two people close to the selection process, did not want to commit more years to the grocer. After the announcement, Rose said that Asda would “benefit enormously from Allan’s experience” and he would continue to support the chain “as a shareholder and customer over the coming years”.
Gary Lindsay, managing partner of TDR Capital, said that Asda “has both a leading superstore estate and a strong position in every format, and Allan’s experience and understanding of Asda will stand us in good stead as he leads the business into the next stage of its development”.
