What’s in store for returning Asda boss Allan Leighton? | Asda

Allan Leighton faces a back to the future challenge as he once again takes charge at struggling Asda. Two decades on from his first spell turning around the supermarket chain, he has been appointed as its executive chair, tasked with repeating the feat.

When Leighton, 71, left Asda in 2000 it was a scrappy challenger to Tesco and Sainsbury’s and he had just revived the chain and engineered a sale to Walmart for more than £6bn. Now, it is a lumbering incumbent with 580 supermarkets plus more than 500 convenience stores and risks losing its spot as the UK’s third-largest grocer to a new generation of cheaper discount rivals and small high street stores.

First time round, Leighton helped save Asda from collapse with then chair Archie Norman, now chair of Marks & Spencer. Here is what is in Leighton’s in-tray as he tries to get the troubled business back on track once more.

Finding a chief executive

Leighton’s No 1 job will be finding a retail expert to tackle the business basics that have gone awry since the £6.8bn takeover in early 2021 by Blackburn’s billionaire Issa brothers and private equity firm TDR Capital.

Several candidates are believed to have turned down the position – which has been vacant for three years – because of fears of interference by co-owner Mohsin Issa, who was leading Asda until September.

Leighton, who has a reputation as a hands-on, down-to-earth executive, has a bulging contacts book from his slew of boardroom positions. These included roles at BHS, Leeds United and Royal Mail.

Most recently, Leighton spent a somewhat bumpy eight years as chair of the Co-op Group, where he helped the mutual recover from the near collapse of its banking arm.

At the Co-op, Leighton worked with Richard Pennycook, a turnaround specialist who helped restore Morrisons. He is now on the board of chicken supplier 2 Sisters and kitchen maker Howdens so appears an unlikely hire.

The current Co-op boss, Shirine Khoury-Haq, has been unafraid to cut costs while pulling a strong team together, so may be a possibility, and there is also ambitious Co-op food boss, Matt Hood, to consider, although his experience is in small stores.

Leighton is more likely to focus on those with large supermarket experience and perhaps an Asda connection. He will want young blood – someone with experience and energy who is prepared to build a name for themselves in a difficult job.

Tackling debts

The marketing expert is tasked with reversing the slide in sales as it wrestles with IT issues and heavy debts since the takeover.

Asda’s difficulties largely stem from its £8.5bn debt burden, which has curbed its ability to cut prices and invest in stores. Rival Morrisons sold off assets including property and petrol forecourts to lower its debts, but Asda has fewer options, having already raised millions from property deals.