Asda chairman Lord Rose has admitted he has been “embarrassed” by the supermarket’s decline on his watch and under the ownership of the Issa brothers.
Speaking after Asda posted a 2.1pc drop in like-for-like sales in the first half of the year, Lord Rose gave a blunt assessment of the supermarket’s recent performance.
He said: “I am going to be perfectly honest with you. I’ve been in this industry for a long time and I am slightly embarrassed. I won’t deny that.
“I don’t like being second, third or fourth. And if you look honestly now at the comparative numbers of Kantar or whatever index, we are not performing as well as should be. And I don’t like that.”
Asda’s market share has fallen from 14.8pc when the Issa brothers acquired it in 2021 to 12.7pc in July. Meanwhile the German discounters Aldi and Lidl have gained ground, as has Tesco.
The former Marks & Spencer boss said he would urge Mohsin Issa to permanently step back from the day-to-day running of Asda as it battles to reverse falling sales and market share erosion.
He said: “I wouldn’t encourage him to [intervene in operations], and I am the chairman.”
Lord Rose, who has been Asda’s chairman since months after the £6.8bn takeover, plans to take an increasingly active role while it seeks a full-time chief executive to take charge in the new year.
Asda has already revealed plans to invest tens of millions in extra checkout staff in a tacit admission that it had pushed self-checkout too far.
Mohsin Issa, who remains a 22.5pc shareholder in Asda alongside its controlling private equity owner TDR Capital, is soon expected to devote more time to EG Group, the Blackburn-based petrol forecourt business where he made his fortune alongside younger brother Zuber.
Lord Rose said: “We need a full-time fully experienced retail executive to come in.
“We always said Mohsin was a particular horse for a particular course. He is a disrupter, an entrepreneur, he is an agitator. We’ve added a significant number of stores and we’ve changed a lot but it now needs a different animal. In the nicest possible way, Mohsin’s work is largely complete.”
Zuber Issa sold his stake in Asda this year as part of a separation of some of the Issas’ business interests, which came on the back of family upheaval.
Under Mohsin’s management, Lord Rose said Asda had neglected customers after focusing too much on an £800m IT project dubbed Project Future. The supermarket has been attempting to disentangle its systems from those of former owner Walmart as its market share has ebbed.
Lord Rose, who visits the supermarket’s Leeds HQ each week, said: “Walmart owned Asda for 20 years and they ran it as a business that was not a core part of its global operations.
“Whilst we have been focusing on one side intensively, probably our eyes have been a little bit off the ball on other things. And I still regard myself as a shopkeeper, I walk into a shop and I hope to see it through the customers’ eyes.
“We had to transition off the mothership’s systems. It has probably been a bit understated by us in terms of how big a job it is. It’s £800m of spend, it’s three years and it is hundreds and hundreds of extra people.
“Tesco and Sainsbury’s haven’t faced a systems change.”
Asda must complete the IT project by the end of the year or will face steep fees from Walmart, which retains a 10pc stake. Some industry sources suggest this could quickly rise to tens of millions of pounds.
Lord Rose said Asda will not rush to finish, however. The shift has already caused chaos in payroll that meant tens of thousands of workers were paid incorrectly.
He said: “There is an incentive for us to finish on time but if you were asking me, if it meant paying a little bit of extra fees to make sure you have the safety of transition, then I’d pay a little bit more.”
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