Allan Leighton has returned to Asda as executive chairman to lead a significant turnaround, projecting a 3-5 year timeline for revival.
- Leighton is focusing on restoring Asda’s core values, particularly in pricing, to regain its competitive edge.
- He is actively seeking a new CEO who understands both shoppers and management, not necessarily from retail.
- Addressing IT issues is part of the strategy to reclaim Asda’s lost competitive advantage after transitioning from Walmart systems.
- Shareholders, including TDR Capital and Walmart, support Leighton’s vision for growth despite recent financial setbacks.
Allan Leighton has rejoined Asda as the executive chairman, outlining a comprehensive plan to revitalize the supermarket chain over the next three to five years. He emphasized the need to restore Asda’s core values, particularly focusing on competitive pricing, to regain its standing in the market.
Leighton has committed to this turnaround period, expressing that it will take substantial time and effort to achieve the desired transformation. His primary goal is to restore Asda’s DNA, focusing on its pricing strategy and operational processes. This involves enhancing product availability and finding a new chief executive officer, who may not necessarily come from a retail background, but must have a strong understanding of customer behavior and management.
On his first day, Leighton communicated with all store managers via video conference and met staff at the Leeds headquarters to discuss his plans. He aims to have a revival plan ready by the end of January. Meanwhile, he continues to visit stores to gain insights and align efforts for improvement.
One of the technical challenges facing Asda is the loss of competitive advantage due to IT issues after the transition from Walmart’s systems. Despite this, Leighton reassures that these are fixable problems. In addition, he noted shareholder alignment on the growth strategy, with backing from TDR Capital, Mohsin Issa, and Walmart.
Recent reports indicate Asda has experienced a drop in quarterly sales and faces a £100 million increase in its tax bill due to governmental budget changes. The company has been enhancing customer experience and investing in value to counteract these challenges, amidst strong competition from major players like Tesco and fast-growing discounters such as Aldi and Lidl.
With a clear vision and strategic support, Allan Leighton is poised to guide Asda through a demanding yet promising journey towards recovery.
