Asda revealed that co-owner Mohsin Issa would step back from his executive leadership role at the supermarket, with chair Stuart Rose set to take over the running of the retailer, supported by TDR Capital partner, and ex-eBay Europe boss, Rob Hattrell.
It seems like Rose has gotten what he wanted after he last month admitted he was “embarrassed” by the grocer’s performance and wanted Issa to step back.
The former M&S boss said: “I wouldn’t encourage him to [intervene in operations], and I am the chairman.”
“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.”
Rose may not be the permanent CEO that Asda has been seeking, but as its market share is revealed to have plunged from 13.1% to 11.8% over the past year, is he the man to stop the rot at Asda?
Who is Lord Rose?
Lord Rose, who was appointed as Asda chairman in December 2021, has a wealth of retail and business experience, having served as a chair, board director and chief executive of many of the UK’s largest retailers, including M&S, where he has served as CEO and executive chair between 2004 and 2011.
He had an eventful tenure at M&S where he fought off an aggressive bid to buy the business from ex-Topshop owner Sir Philip Green, and turned around M&S’ fortunes.
He has also held executive roles at the Burton Group, Argos, Booker and Arcadia.
Rose’s non-executive career includes roles at international giant Woolworth and Ocado, where he spent seven years as chair. He is also currently chair of TDR and Issa-owned EG Group.
Shore Capital vice chair Clive Black argues: “Lord Rose has been at EG/Asda for a while and so knows the owners and the executives, which is a big matter.
“He is probably not a long term appointment but he can raise the bar, focus and stabilise, which is necessary.”
Recruitment specialist, Detail Business Consulting managing director Paul Meechan, adds: “[Rose’s] understanding of retail is exceptional, his understanding of people is equally good.
“His whole background is littered with bringing in exceptionally talented people and actually letting them do what they do.”
He continues: “Stuart is very obviously the right person to be doing it just now. I think it’s a pity that [the Issa brothers] didn’t lean on Stuart earlier.
“Stuart understands the business because he’s been there a little while, he understands retail, he understands people so he’s got all those bases covered.”
GlobalData senior retail analyst Eleanor Simpson-Gould says the appointment is “reassuring” given that both Rose and Hattrell are well versed in running large retail operations.
However, she warns: “Under a brightening spotlight, the transition must be swift to turn around Asda’s dismal sales performance and provide stability at the grocer.”
Not all are so positive about the appointment. Retail analyst Nick Bubb describes Rose’s “underwhelming,” noting that Asda will need to “keep looking for a more permanent solution”.
“He’s no spring chicken…and running Asda isn’t exactly his cup of tea, as they say, so this is clearly just a short-term arrangement,” he adds.
What changes will Rose make?
Search consultant Tony Gregg, CEO of the Anthony Gregg Partnership, doesn’t think Rose will want to take on the “day to day” work in the role.
“He’s been there, done it,” he says. “Everybody respects him, there’s enough people around him to do the day to day.”
Given that Rose previously served as the supermarket’s chair rather than in an executive role, some may argue the adjustment to a more intense day to day role will be a big pivot.
However, Black notes: “Stuart Rose is very practical, grounded, and straightforward, so it should not be a difficult adjustment. He is also used to hard work.”
When it comes to changes he expects to see from Rose leading the supermarket, Black says: “I would imagine he will be addressing the basics, company morale, direction of travel, and retail priorities.
“Availability, assortment, value credentials and then improving operations and so margins.”
Simpson-Gould says online should be a big focus. The supermarket achieved record online grocery sales in 2023, as sales hit £3.2bn and ended the year with its highest ever online grocery market share of 20.8%.
“Asda must focus on its online capabilities this year to re-establish itself as a dominant player in the market and Rob Hattrell’s online expertise will aid growth in Asda’s digital channel.”
Asda’s search for a CEO continues
Rose and Hattrell undoubtedly have strong experience but are clearly a temporary solution as Asda continues its search for a new CEO.
It’s been a long process, and even Issa’s pledge of paying its new boss up to £10m – which would make them the joint highest paid boss in retail, matching Tesco boss Ken Murphy’s hefty pay packet – has failed to find the right candidate.
Since 2021, Issa has been overseeing the business following Roger Burnley’s early departure due to a strategic disagreement, and prior attempts to appoint a new leader were unsuccessful in 2022.
In terms of why Asda is finding it so difficult to find a new chief executive, Bubb says: “I assume that people have been put off by the uncertainty about the involvement of the Issa brothers, as well as the trading and IT challenges at Asda.
“But now the Issas are off the scene and the IT systems are, hopefully, closer to being resolved, Asda should be able to attract an experienced retailer, possibly from overseas and rebuild the management team and in time this will be seen as just a stop-gap approach.”
Black also claims that Issa has been a “barrier to appointments”. “With TDR now the key shareholder, necessary change has emerged, with more to come,” he says.
However, Rose will likely be leading the ship for a while.
Meechan says: “Does [Rose] want to go back into things full-time? Absolutely not, so I would think top of his list of priorities will be to find Asda a CEO.
“The problem is when you find them is that you’re going to be looking at at least six months before they can start, if not a year and if they are really good, it will be a year which is problematic.”
Given this, he will need to take action, and fast, if he is to stem Asda’s decline. His vocal criticism of the supermarket’s performance would suggest he has strong views on what change that is needed. All will be watching over the coming months to find out what exactly this entails.
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