Allan Leighton returns to Asda to steer a major transformation, potentially spanning the next three to five years.
- Leighton prioritises restoring Asda’s core values, focusing on price improvement and product availability.
- He is on the hunt for a new CEO who understands customer dynamics and people management.
- Asda’s IT challenges post-Walmart transition need urgent attention, impacting its competitive position.
- The retailer struggles against price rivals and discounters, with recent sales declining significantly.
Allan Leighton has rejoined Asda, launching a mission to reverse its fortunes over the coming years. He served as a former CEO and has now returned as executive chair, bringing with him a focus on core company values. Leighton’s strategy includes improving pricing and product availability, along with finding a successor CEO who may not come from a conventional retail background but possesses strong insight into customer behaviour and effective people management.
Leighton’s immediate goal is clear: develop a comprehensive revival plan by the end of January. He is committed to instilling Asda’s traditional strengths back into the business, believing it is essential for future growth.
The shared vision between Leighton and Asda’s investors, including TDR Capital and petrol forecourts entrepreneur Mohsin Issa, further solidifies this initiative. Leighton remarked, ‘confidence in my leadership’ and a collective belief in the potential for Asda’s growth.
A significant challenge faces Asda: addressing its IT shortcomings. Since transitioning from Walmart’s systems, Asda has experienced a notable drop in its technological edge, affecting operational efficiencies. Leighton acknowledges these difficulties, underscoring the need for ‘restoration of IT proficiency’ to reclaim its competitive capability.
Adding to the complexity is Asda’s declining market performance. Reports indicate a fall in quarterly sales coupled with a forecasted increase in tax expenditure due to changes in the government’s budgeting policies. As the retailer endeavours to enhance the shopping experience and value for customers, it faces fierce competition in the grocery market where Tesco, Sainsbury’s, Aldi, and Lidl are making significant inroads.
These challenges are reflected in recent sales figures from Kantar, revealing that Asda was among the few top retailers witnessing a drop in market share. Over a 12-week period ending in November, Asda’s market share decreased by a full percentage point to 12.5%, and sales fell by 5.5%. Leighton, along with Asda’s stakeholders, recognises the urgent need for strategic adjustments to reverse this trend.
Asda’s revival under Allan Leighton’s leadership involves tackling crucial operational and market challenges, aiming for a restructuring path that spans several years.
