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

Asda co-owner Mohsin Issa is stepping back from his executive leadership role today (18 September) with chair Stuart Rose taking on executive responsibilities alongside TDR Capital partner Rob Hattrell, at least until it finally hires a permanent CEO.

While it marks a shake-up for the retailer’s leadership team, it doesn’t exactly come as a great shock following Rose’s comments last month when he admitted to being “embarrassed” by its performance and said Issa should step back from the day-to-day management of Asda.

At the time, he stated: “I wouldn’t encourage him to [intervene in operations], and I am the chairman. 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.”

While Issa remains co-owner of Asda and sits on the board, the day-to-day running will now fall under the leadership of Rose and Hattrell, alongside the rest of the supermarket’s – largely recently installed – leadership team. But are they the right people for the job and can they finally get Asda back on track?

Is Stuart Rose the person to take on Issa’s role?

Lord Rose has “seen it all”, according to Shore Capital director Clive Black, with the retail veteran having been chair, board director and chief executive of many of the UK’s biggest retailers, including M&S from 2004 to 2010.

He has also held executive roles at the Burton Group, Argos, Booker and Arcadia and non-executive roles at Woolworths in South Africa and Ocado, where he spent seven years as chairman between 2013 and 2020.

Rose wa­­­­­­­­­­­­­­­­s hired as Asda chairman in December 2021, and while he may only be taking on Issa’s responsibilities until the grocer’s long-running search for a CEO is complete, Black says that for an interim period, he is “a strong appointment on paper”.

Black adds: “More to the point, he is a notable improvement on the prior incumbent, where matters were just clearly not working, as expressed by no other than Lord Rose recently.”

Retail search specialist, Paul Meechan, managing director of Detail Business Consulting says that he would imagine Rose has “been the driving force of the change” after previously stating that “Mohsin’s work is largely complete”.

Meechan says the appointment is a positive step for Asda.

“His understanding of retail is exceptional, his understanding of people are equally good. His whole background is littered with bringing in exceptionally talented people and actually letting them do what they do. Stuart is very obviously the right person to be doing it just now.”

While retail consultant Nick Bubb says that it’s “no great surprise” to see Rose involved in the management shake-up, he notes that the chairman is “no spring chicken,” adding that “running Asda isn’t exactly his cup of tea, as they say, so this is clearly just a short-term arrangement”.

Meechan agrees. “He’s a very capable guy. Does he 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.”

What can Rob Hattrell bring to Asda’s leadership team?

Rose will be supported by Rob Hattrell, an executive at Asda’s majority owner TDR Capital, who sits on the grocer’s board.

Hattrell joined TDR Capital in September 2022 as head of digital, having previously held the role of senior vice president for eBay Europe in charge of the European business strategy and operations.

Prior to this, he spent seven years at Tesco in various roles including leading the general merchandise business and as chief information officer.

Executive search consultant Tony Gregg, chief executive of the Anthony Gregg Partnership, describes Hattrell as “a great leader, great brain, great pedigree”.

“He’s one of very few who have the brains with the strategy, but also the people skills as well.”

He adds that Hattrell will be a “complete breath of fresh air” at Asda as will “steady the ship”.

Meechan agrees that he is “an exceptionally able, very clever” individual who is “very much able to be hands on and will be a lot more hands on going forward”.

Who is is on the Asda leadership team?

Rose and Hattrell will be supported by Asda’s leadership team, many of which are recent hires.

The grocer’s swathe of recent appointments include former Morrisons chief information officer Matt Kelleher as its first ever chief digital officer, former Iceland group chief customer, marketing and digital officer David Devany as its new vice president for ecommerce, and Lidl chief operating officer Matt Heslop to lead its stores and depots operation, including the 470 convenience stores in its newly-established Asda Express division.

Meechan describes the new hires as “necessary”, adding that Matt Kelleher is “a very capable guy” and in terms of  the mechanics and technical side of the role.

“He’s a very good hire and I’m sure he’ll do a very good job. What he did with Morrisons in terms of scaling it, he did a good job within that framework.”

Meechan is equally positive about Heslop.

“He’s been involved in a business that has grown like topsy over the last 30 years and has continued to grow at a rate of knots. It’s a really class hire. What he’s done and been responsible for in Lidl is astonishing.”

The new hires join the likes of Kris Comerford, who Gregg says is “an outstanding commercial director” and adds that Asda now has “some great people” within its executive team.

Can the new team turn around Asda?

The team have a big task ahead of them as Asda has been leaking market share for the past few years. According to the latest Kantar data, the supermarket’s sales fell 5.6% in the 12 weeks to 1 September, with its market share dropping 1.2 percentage points to 12.6% over the past year.

Elsewhere, it has faced issues such as IT challenges and store strikes.

For Gregg, what has been lost at Asda is its “people-focus”, something he stresses is important to bring back.

He says that moving forward, Hattrell will “start listening to the team about what needs to be done”.

Although Hattrell and Rose are running the business for the time being, its long-running search for a CEO continues, which Meechan notes is “a bit of a concern”.

However, he says with the pair both being hands-on, it’s “probably less of a concern than it was a few weeks ago”.

“It’s another case of everything turning 360 degrees, but I have a lot more faith in Asda going forward from today than I did have a month ago,” he adds.

It adds to further postive moves at the supermarket, as last month Asda unveiled a three-pronged plan to deliver a “more consistent experience” as it looks to boost customer satisfaction, enhance product availability, and introduce a renewed trading plan.

This includes investing an additional £30m in staff hours to improve stock replenishment during opening hours in store, increase the number of staff on checkouts at the weekend, and ensure stores are clean.

Asda is also ploughing £50m into store upgrades, which it kicked off at the end of May.

However, not everyone is blown away about today’s changes.

Bubb says that the appointments “look underwhelming”, adding that “Asda will have to keep looking for a permanent solution”.

He notes that when it comes to a CEO: “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.”

However, he has hope. “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.”

Putting two experienced retailers at the helm is a decent temporary solution to help stem the decline at Asda, but top of their agenda has to be finding a CEO to steer the ship on a permanent basis.