Asda chairman Lord Rose has expressed his embarrassment at the supermarket chain’s recent decline, particularly under the leadership of the Issa brothers.
In a candid interview with TelegraphRose acknowledged the challenges Asda faces, revealing his concerns about the company’s declining performance and market share.
After a 2.1% decline in sales in the first half of the year, Rose offered a stark critique of the supermarket’s trajectory. “To be perfectly honest, I’ve been in this industry for a long time, and I’m a bit embarrassed. I won’t deny that,” he said. “I don’t like being second, third or fourth. If you look at the comparative figures from Kantar or other indicators, we’re not performing as we should be. I don’t like that.”
Since the Issa brothers took over Asda in 2021, the supermarket’s market share has fallen from 14.8% to 12.7% as of July. In contrast, rivals such as Aldi, Lidl and Tesco have made significant gains.
Rose, the former chief executive of Marks & Spencer, has suggested that co-owner Mohsen Issa should step down from Asda’s day-to-day operations. “I wouldn’t encourage him to interfere in the operations, I’m the chairman,” he said, referring to the need for more experienced retail leadership as Asda struggles to cope with challenges.
Having only just taken over as chairman of Asda following the £6.8bn takeover, Rose plans to take a more active role in the supermarket’s recovery as the company looks for a full-time chief executive to take the helm in the new year. Meanwhile, Asda has announced plans to invest tens of millions of pounds in increasing the number of self-checkout staff, acknowledging that the push for self-checkout has gone too far.
Mohsen Issa, who holds a 22.5% stake in Asda alongside private equity firm TDR Capital, is expected to shift his focus to EG Group, the petrol station business where he first found success. Rose said Asda now required a different kind of leader, saying: “We always said Mohsen was a particular horse for a particular track. He was a disruptor, an entrepreneur, a motivator. We’ve added a lot of stores and made a lot of changes, but it now requires a different animal. In the best possible way, Mohsen’s work is largely done.”
Mohsen’s brother, Zuber Issa, sold his stake in Asda earlier this year as part of a wider split of the Issa family’s business interests, following internal family disputes.
Rose also noted that under Mohsen’s leadership, Asda had lost focus on its customers and had become overly involved in an £800m IT overhaul dubbed Project Future. The project aimed to separate Asda’s systems from those of its former owner, Walmart, a process that proved complex and time-consuming.
Speaking about the shift, Rose, who visits Asda’s Leeds headquarters every week, said: “Walmart owned Asda for 20 years and ran it as a business that wasn’t a core part of its global operations. While we were very focused on certain aspects, we may have lost sight of others. I still see myself as a retailer and when I go into a store I try to look at it through the eyes of the customer.”
The IT project is due to be completed by the end of the year, with significant financial penalties for delays. However, Rose stressed the importance of a smooth transition, even if it entails additional costs. “There’s an incentive to finish on time, but if it means paying more to ensure a smooth transition, I’ll pay more,” he concluded.
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