Asda is “not where it should be” following its buyout by private equity firm TDR Capital and the Issa brothers, its former boss has said.
Walmart’s former international boss Judith McKenna, who led the grocer’s £6.8bn sale in 2021, admitted the supermarket chain’s recent struggles “hurt my heart”.
Asda’s market share has fallen steadily over the past year as the supermarket battles with massive debt piles and a resource draining project to separate its core IT systems from the Walmart’s infrastructure.
Speaking at The FT Live Future of Retail conference on Tuesday, she said one of the initial strengths the Issa brothers had over other potential Asda buyers was an “entrepreneurship” and an ability to “do something different in UK supermarket retailing”.
“Through circumstances; economy, distraction, whatever that has been. It’s clearly not where it needs to be,” McKenna said.
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She highlighted Asda’s ongoing systems transformation as a key issue, saying she hoped it was completed “soon”.
The supermarket chain has come under fire over its transition, which has led to a drain of resources, issues with staff pay and customers orders.
McKenna said: “It is way harder to get out of systems, than it is to get into them.
“That is a good business and great colleagues. Ultimately, I wish them well, but does it hurt my heart a little? Yes, it does.”
McKenna added that while Asda was seen somewhat of a drain on Walmart’s balance sheet, the supermarket brought value to the group in other ways.
“I don’t believe that Walmart would be doing the kind of things it is doing today on grocery online – it is the biggest grocery home shopping business in the US – had it not got the jump-start that the technology and capability from Asda gave it.
“Very often there is a financial decision, and there is a kind of human/capital decision. Make no mistake – maybe not so much people, but definitely on some of the other things that we did, they made a tremendous difference not just to Walmart US, but around the world.”
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