The boss of Asda has warned there is no quick fix at the crisis-hit supermarket as sales continue to fall after its private equity takeover four years ago.
Executive chairman Allan Leighton said profits will be ‘materially’ lower this year as he prepares to plough millions of pounds into a turnaround plan.
The profit warning sent shares in listed rivals sharply lower with Tesco down 8.7 per cent and Sainsbury’s off by 7.8 per cent.
Despite Asda’s troubles, Leighton insisted the grocer is in no rush to fill the chief executive position – which has been vacant since 2021 – as he set out a rescue strategy.
US retail giant Walmart sold Asda to the billionaire Issa brothers and private equity firm TDR Capital for £6.8billion four years ago.
The supermarket chain was saddled with billions of pounds of debt and has seen its market share eroded. And it risks losing its spot as the UK’s third-biggest grocer to German discounter Aldi.
Struggle: US retail giant Walmart sold Asda to the billionaire Issa brothers and private equity firm TDR Capital for £6.8billion four years ago
Retail veteran Leighton, 71, was parachuted in last year to replace Stuart Rose, who had taken on day-to-day running of the chain after co-owner Mohsin Issa stepped down.
He was Asda chief executive between 1996 and 2001 – introducing its Rollback and Asda Price initiatives and overseeing its sale to Walmart for £6.7billion in 1999. He went on to lead the boards of Co-op, Royal Mail and Brewdog.
Asda sales last year were ‘disappointing’, Leighton admitted yesterday, as the grocer reported revenue dipped 0.8 per cent to £21.7billion in 2024. The supermarket is yet to hire a chief executive and there is no formal recruitment process underway. Leighton dismissed talk that Asda has been unable to fill the role because nobody wants to take on the job.
He said he could have a new boss ‘tomorrow’, adding that the company has been approached by ‘five or six’ people interested in the role.
Admitting there are no easy answers to the difficulties, he said: ‘While regaining customers’ trust will take time, we will undertake a substantive and well backed programme of investment in price, availability and the shopping experience to deliver this.’
The company’s adjusted earnings before tax and other costs, and after rent, came in at £1.14billion for the past year – up 5.8 per cent on 2023.
Asda said it ended the year with net debt of £3.8billion, and about £800,000 cash on its balance sheet.
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