‘Asda turnaround could take three to five years’: Allan Leighton returns to run retailer | Asda

It could take three to five years to revive Asda’s fortunes, according to the veteran retail boss Allan Leighton, who first helped turn around the supermarket chain more than 20 years ago.

Speaking to the Guardian on his first day in the job as executive chairman, Leighton, who has taken over from fellow retail veteran Stuart Rose, said his first priority was to “restore Asda’s DNA”, which included improving price.

The former Co-op and Royal Mail chair said he had committed three to five years of his time to Asda as “it is going to take us that long to get it right”.

The 71-year-old said he had already visited a number of Asda stores and spoken to all store managers via video conference on Monday, with some familiar faces among the crowd.

He also spoke to all the staff at Asda House, the group’s Leeds headquarters, in person on Monday as he laid out three priorities – restoring the group’s “DNA” on price and ways of working, improving availability and recruiting a new chief executive.

Leighton, who intends to come up with a revival plan for the business by the end of January, said he was looking for a “really good leader” who may not necessarily be a retailer but who understood shoppers and managing people.

He said Asda’s shareholders – the private equity firm TDR Capital, the petrol forecourts entrepreneur Mohsin Issa and US supermarket group Walmart – were totally aligned with his view that the retailer “has to grow” and he was “confident I have the support in this” from them.

He said Asda had a good chain of stores but needed to address its IT issues, which developed once it moved off former owner Walmart’s systems, which meant it had “lost significant competitive advantage”.

But he insisted “they are all fixable”. Leighton, who left Asda in 2000 after eight years at the business, latterly as chief executive, said of his return that “bizarrely it feels like I have never been away”.

“I feel totally back home,” he said.

Leighton said he had been in talks about returning to Asda for two or three months and had finally been persuaded to take up the role as “I didn’t like the idea it wasn’t doing well. The pull was just too much,” he said.

He originally left after helping revive the chain and securing a sale to Walmart for more than £6bn.

The group, which has 580 supermarkets and more than 500 convenience stores, risks losing its spot as the UK’s third-largest grocer to a new generation of cheaper rivals led by German-owned discounters Aldi and Lidl.

The group has lost one percentage point of market share in the past year as sales fell, according to analysts at Kantar, despite the grocery price inflation that has helped its main rivals grow.

Since the £6.8bn takeover in early 2021 by Blackburn’s billionaire Issa brothers and private equity firm TDR Capital, Asda has struggled to compete on price and service. Bigger rivals Tesco and Sainsbury’s have been gaining ground, as have Aldi and Lidl.

The business has not only been hampered by a heavy debt burden resulting from the takeover deal but also the cost and difficulty of shifting on to new IT systems from former owner Walmart’s tech.

There have also been question marks over leadership since the exit of former chief executive Roger Burnley three years ago, with co-owner Mohsin Issa nominally in charge until September this year.

Issa has now stepped back as part of a reorganisation in which his brother Zuber sold his 22.5% stake to TDR.