Asda’s Chairman Pauses Search For CEO As He Makes Progress With Recovery Plan In A Race Against Time

Asda has “paused” its long-running search for a Chief Executive as new Chairman Allan Leighton implements his turnaround plan for the struggling supermarket.

Asda has now been without a permanent CEO since the abrupt departure of Roger Burnley in August 2021 and Mohsin Issa stepping back late 2024.

In an interview with The Times last week, Leighton said: “I’m going to take another couple of months to see what it is we need.

“It’s very important to get somebody, and to get a team, that is going to be here for the next 5, 7, 8 years".

He added: “It is about getting the range right, getting the price right and getting the availability right. And we’ve got to win the hearts and minds back of our people. Why we are where we are is largely self-inflicted.”

Key steps:

• Revival Asda’s Rollback price-cutting campaign
• Restore a price 5 -10% price gap
• Ban Red signage
• Restore 98.5% availability vs 90%

However, he warned that it will take three to five years to fully restore Asda

Re Asda Finances: “Last time we put out our numbers, we had a billion of cash on the balance sheet. The last two or three years, we have probably generated £600m to £700m of cash flow. I’m not at all worried about it. What is our leverage? Three times. We have got £8.5bn of assets.”

A separate report by the Telegraph suggested that Asda’s high level of debt is putting pressure on executives to consider cashing in on the company’s sprawling property portfolio. In 2023, the company’s owners started looking into the sale and leaseback of various properties to help combat soaring interest bills on the debt.

Newsteer, which has been advising Asda on the latest land sales, recently issued a note to potential developers saying the supermarket had identified “surplus space” at stores in Slough, Reading, Burgh Heath near Epsom, Tilbury in Essex and Cardiff. Newsteer stated that developers could convert the car park land into new homes or shops that would sit next to the existing Asda supermarket.

A spokesperson for Asda is quoted by The Telegraph as saying: “It’s common practice for national retailers with large property portfolios like Asda, Tesco and Sainsbury’s to explore how best to make use of surplus land in their property estate. Prospective parties interested in these sites are advised to contact Newsteer.”

NamNews Implications:

• Asda is in a race against time…
• And ‘cutting’ can be the fastest approach.
• Meaning selling least profitable stores until a profitable estate remains.
• Meaning the use of store sell-off proceeds to pay down debt, thereby cutting the interest burden. 
• Meanwhile, cutting prices to a point that restores Asda’s relative competitive appeal and encourages profitable repeat sales.
• (never forgetting the PE exit strategy…)
• i.e. back to a race against time…