Asda’s recent struggles after its acquisition have sparked concern among former executives who played key roles in the company’s past success.
- Judith McKenna, a former Asda executive, expressed her worries about the company’s direction since its acquisition by TDR Capital and the Issa brothers.
- McKenna highlighted the challenges Asda faces, particularly in managing its technological transition away from its Walmart systems.
- The grocery retailer is contending with declining market share and significant debt issues.
- McKenna’s sentiments reflect a broader concern about the potential impact of these challenges on Asda’s future.
Judith McKenna, a distinguished former executive of Asda, shared her thoughts at the FT Live Future of Retail Conference, articulating that Asda is “clearly not where it should be” following its acquisition by private equity firm TDR Capital and the Issa brothers. McKenna, who had been instrumental in orchestrating Asda’s £6.8 billion sale in 2021, now voices concerns over its present trajectory.
She remarked on the initial appeal of the Issa brothers’ acquisition, citing their ‘entrepreneurship’ and potential to innovate within the UK supermarket sector. However, McKenna acknowledged that various factors, such as the economy and internal distractions, have impeded Asda’s progress.
Asda has encountered numerous hurdles this year, notably its ongoing struggle with slumping market share and a burdensome debt level that continues to challenge the business. These issues are exacerbated by Asda’s efforts to extricate itself from Walmart’s legacy IT systems, a transition fraught with complications that have disrupted both employee compensation and customer service.
McKenna candidly mentioned, “It is way harder to get out of systems than it is to get into them,” underlining the complex nature of the IT shift. She also expressed a personal sense of disappointment, stating, “That is a good business and great colleagues. Ultimately, I wish them well, but does it hurt my heart a little? Yes, it does.”
The overarching sentiment among former leadership highlights critical concerns about Asda’s strategic position and its ability to navigate substantial challenges.
