Allan Leighton returns to Asda as executive chair, succeeding Stuart Rose.
- Leighton previously turned Asda around in the 1990s with Archie Norman.
- Leighton commits to a three to five-year turnaround plan for Asda’s struggles.
- Asda faces market share decline amid sales fall and operational challenges.
- Observers optimistic but cautious about Leighton’s ability to rally Asda.
Allan Leighton, a veteran in the retail sector, has been reappointed as the executive chair of Asda, succeeding Stuart Rose. With a history of leading Asda from 1996 to 2001, Leighton is credited with pulling the supermarket chain back from near-insolvency to a profitable sale to Walmart. Now, decades later, he faces a new set of challenges as Asda grapples with declining market share and other internal struggles.
During Leighton’s past tenure, he and Archie Norman were instrumental in rescuing Asda from difficult financial conditions. However, the challenges he encounters now are different. He has pledged to commit three to five years to steer the company in the right direction, acknowledging the complexity of the task at hand. Earlier this month, Asda registered a drop in its market share from 13.5% to 12.5% as sales slid by 5.5% over a 12-week period.
Leighton’s return coincides with a myriad of challenges plaguing Asda. The supermarket is dealing with ownership changes, an IT transformation that’s been less than smooth, considerable debt, staff reductions, and a yet unfulfilled search for a new CEO. These issues compound the difficulty of the task ahead, making Leighton’s leadership crucial.
From 2015 to 2024, Leighton was chair of the Co-op, demonstrating his aptitude for revitalising retail businesses. His broad experience also includes leadership roles at Royal Mail and the Canal and River Trust. Relating to his return, Steve Dresser, CEO of Grocery Insight, expressed that though unexpected, Leighton’s return is timely and makes sense given the current retail environment.
Addressing concerns about whether Leighton’s skills are still relevant, Dresser believes that the foundational skills that worked in past retail environments still hold value today. Morale, purpose, and quality perception are among the areas recognised as being rectifiable under adept leadership. Nevertheless, Nick Bubb, a retail consultant, cautioned that while Leighton is exceptional in motivating staff, deeper systemic issues also need attention, including store standards and IT hurdles.
In recent efforts to boost shopper satisfaction and sales, Asda has focused on improving product availability and customer experience, yet quarterly sales still declined. Additionally, the business anticipates a £100m increase in tax expenses owing to new budget changes, further complicating the landscape. Simon Walton of Berwick Partners remains confident in Leighton’s ability to emulate past successes, pointing to his effective turnaround at the Co-op.
The persistent lack of a chief executive adds to Asda’s woes, with many, including Dresser, considering this the top priority for the supermarket’s leadership. Walton suggests that Leighton’s presence may re-engage former Asda leaders to aid in the revival effort. Despite intense competition from rivals like Sainsbury’s and Tesco, Clive Black from Shore Capital regards Leighton’s return as a strategic move, though time will reveal its success.
Allan Leighton’s return to Asda marks a significant step in addressing the supermarket’s current struggles, as cautious optimism surrounds his leadership.
