As Mohsin Issa steps down, can Asda's new leadership team get it back on track?

Mohsin Issa, one of the co-owners of Asda, is resigning from his role in executive leadership today (September 18). Chair Stuart Rose will now take on executive duties along with Rob Hattrell, a partner at TDR Capital, until the company appoints a new permanent CEO.

Although this change in the retailer's leadership team is significant, it isn’t entirely surprising. Last month, Rose expressed his feelings of "embarrassment" regarding the company’s performance and suggested that Issa should take a step back from the daily operations of Asda.

Back then, he mentioned, “I wouldn’t advise him to get involved in the operations. As the chairman, I believe we need to bring in a dedicated and highly skilled retail executive to take charge.”

"We've always believed that Mohsin was the right person for a specific role. He’s a game changer, a visionary thinker, and someone who stirs things up. We've expanded our number of stores and made many changes, but now we require a different type of leader. To put it kindly, Mohsin’s contributions are mostly finished."

Although Issa continues to be a co-owner of Asda and is part of the board, the everyday operations will now be managed by Rose and Hattrell, along with the rest of the supermarket’s recently appointed management team. The question remains: are they the suitable candidates for this role, and will they be able to steer Asda back in the right direction?

Is Stuart Rose The Right Choice For Issa's Role?

According to Clive Black, a director at Shore Capital, Lord Rose has experienced just about everything in the retail sector. The seasoned professional has held several key positions, including chair, board director, and chief executive, at many of the UK's most prominent retailers, notably serving as the CEO of Marks & Spencer from 2004 to 2010.

He has held leadership positions at the Burton Group, Argos, Booker, and Arcadia, as well as non-executive positions at Woolworths in South Africa and Ocado, where he served as chairman for seven years from 2013 to 2020.

Rose was appointed as chairman of Asda in December 2021. Although he is temporarily stepping in to handle Issa’s duties until the supermarket finishes its protracted search for a new CEO, Black believes that for the time being, he is "a solid choice on paper."

Black emphasizes that, importantly, he represents a significant upgrade over the previous person in the role. The previous situation was clearly ineffective, as highlighted recently by Lord Rose.

According to Paul Meechan, the managing director of Detail Business Consulting and a specialist in retail search, he believes that Rose has likely been the key player in driving the changes, especially since he had previously mentioned that Mohsin's tasks are mostly finished.

Meechan believes that the appointment marks a beneficial advancement for Asda.

"His grasp of the retail industry is outstanding, and his insight into human nature is just as impressive. Throughout his career, he has consistently recruited highly skilled individuals and empowered them to excel in their roles. It's clear that Stuart is the perfect fit for this position at this time."

Retail consultant Nick Bubb mentions that it's "not unexpected" to find Rose participating in the management change. However, he also points out that the chairman is not exactly young, remarking that "leading Asda isn't really his forte, so this is obviously just a temporary arrangement."

Meechan concurs, saying, “He’s a highly competent individual. However, does he have any interest in returning to a full-time role? Definitely not. Therefore, I believe that finding a CEO for Asda will be at the top of his list of priorities.”

What Will Rob Hattrell Add To Asda's Team?

Rose will receive assistance from Rob Hattrell, an executive at TDR Capital, which is the main owner of Asda. Hattrell is also a member of the supermarket's board.

Hattrell became the head of digital at TDR Capital in September 2022. Before that, he was the senior vice president for eBay Europe, where he was responsible for the company's business strategy and operations across Europe.

Before this, he worked at Tesco for seven years, taking on different positions such as overseeing the general merchandise division and serving as the chief information officer.

Tony Gregg, the CEO of the Anthony Gregg Partnership and an executive search consultant, praises Hattrell by saying he is "an exceptional leader with a brilliant mind and impressive background."

"He's among the select few who possess both strategic thinking and excellent interpersonal skills."

He claims that Hattrell will bring a "refreshing change" to Asda and will help to "stabilize the organization."

Meechan acknowledges that he is "extremely capable and quite intelligent," stating that he is "fully equipped to get involved and plans to take a more active role in the future."

Who Are The Asda Leadership Team Members?

Rose and Hattrell will receive backing from Asda's management team, a group that includes several new members.

The grocery store has made several noteworthy hires recently, bringing in Matt Kelleher, the former chief information officer at Morrisons, as its inaugural chief digital officer. They also welcomed David Devany, who previously served as chief customer, marketing, and digital officer at Iceland, to take on the role of vice president for e-commerce. Additionally, Matt Heslop, the former chief operating officer at Lidl, has been brought on board to oversee the operations of its stores and depots, which includes the 470 convenience stores in the newly launched Asda Express division.

Meechan refers to the new team members as "essential," noting that Matt Kelleher is "a highly skilled individual," particularly when it comes to the mechanical and technical aspects of the position.

"He’s a great choice for the position, and I have no doubt he will excel in his role. The way he helped expand Morrisons was impressive, and he performed well within that structure."

Meechan has a similarly optimistic view of Heslop.

He has been part of a company that has expanded wildly over the past 30 years and is still growing rapidly. It's truly impressive. What he has achieved and the roles he has taken on at Lidl are remarkable.

The recent additions to the team include individuals like Kris Comerford, whom Gregg describes as “an exceptional commercial director.” He also mentions that Asda now boasts “some fantastic talent” in its executive team.

Can The New Team Revitalize Asda?

The team has a significant challenge in front of them, as Asda has been losing market share over the past few years. Recent data from Kantar shows that the supermarket's sales declined by 5.6% in the 12 weeks leading up to September 1, resulting in a 1.2 percentage point drop in market share to 12.6% compared to last year.

In other areas, it has encountered problems like technology difficulties and labor protests at stores.

Gregg believes that Asda has lost its emphasis on its customers and staff. He highlights the need to reestablish this people-centered approach.

He mentioned that from now on, Hattrell will “begin to pay attention to the team regarding what actions are necessary.”

While Hattrell and Rose are currently managing the business, the ongoing search for a CEO is still in progress. Meechan expresses that this situation is "somewhat worrying."

He mentioned that since both of them are actively involved, it's likely not as much of an issue as it was a few weeks back.

"It's a situation where everything has come full circle, but I feel much more confident about Asda's future now compared to a month ago," he mentioned.

This contributes to ongoing improvements at the supermarket. Just last month, Asda announced a three-part strategy aimed at creating a "more reliable shopping experience." The goal is to increase customer satisfaction, improve product availability, and roll out a refreshed trading approach.

This involves putting an extra £30 million into employee hours to enhance stock restocking when stores are open, boost the number of cashiers working on weekends, and make sure that the stores are kept tidy.

Asda is investing £50 million in renovating its stores, a project that began at the end of May.

Still, not everyone is thrilled about the changes happening today.

Bubb comments that the new appointments are “disappointing,” noting that “Asda will need to continue searching for a lasting solution.”

He observes that regarding the CEO position, “I believe that many individuals might be deterred by the ambiguity surrounding the Issa brothers' role, along with the difficulties related to trading and technology at Asda.”

Despite the challenges, he remains optimistic. "With the Issas no longer involved and the IT issues hopefully being sorted out soon, Asda should be in a position to bring in a skilled retailer, potentially from abroad, to strengthen the management team. Eventually, this situation will be viewed as a temporary measure."

Having two seasoned retail leaders in charge is a reasonable short-term fix to address the downturn at Asda. However, their main priority should be to find a permanent CEO to lead the company.