Asda CEO replaced as poor results continue

Sean Clarke’s short spell as Asda CEO is about to come to an end.

The Walmart subsidiary has appointed former Sainsbury’s executive Roger Burnley to replace him as the UK supermarket operator looks to overturn a string of what GlobalData Retail food and grocery analyst Tom Berry describes as “a string of desperate results”.

“The move does not come as a major surprise, however, as Roger had been widely tipped as a successor in waiting for the top spot at Asda UK when he joined in October 2016 as deputy CEO. However, although Asda is keen to portray this as a seamless handover, we would expect that had results truly turned a corner, Clarke would be continuing to run this business through 2018.”

Clarke took on the Asda CEO role in July last year with the value grocer in dire straits, having just announced a like-for-like sales decline for the sixth consecutive quarter, and seemingly unable to rebuff the aggressive expansion of Aldi and Lidl since the financial crisis. Despite continuously coming up against negative comparatives over the last 15 months, Asda maintained consecutive poor results, finishing the year with like-for-like sales down by 5.7 per cent. That was followed by a further 2.8 per cent decline in the first quarter of this year.

“While Asda’s most recent quarterly results showed a rise of 0.7 per cent, its first positive result in 12 quarters, in comparison to its competitors this was hardly a cause for celebration,” adds Berry. Morrisons reported a 2.6 per cent increase and both Tesco and Sainsbury’s improved by 2.3 per cent. 

“All posted significantly better results in similar time periods, with average CPI inflation of 2.6 per cent over the three months from April to June the main driver behind Asda’s return to positive growth, rather than any real improvement in its proposition.”

Berry says Burnley faces an uphill battle when he takes over after Christmas, with the discounters expanding apace, premiumising their ranges and developing consumer trust in their own brand items.

“Asda must firstly revamp its stores to meet the improved expectations of shoppers following increased investments from the other big four players, and the discounters. It must then find a place in the market to distinguish itself from those competitors.”

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