THAT Asda has called in the cavalry in the form of its former chief executive Allan Leighton in a bid to halt a slump in sales is surely a shrewd move by the supermarket group. It is also an unexpected one – or at least it came as a shock to the retail industry.

However, his return as executive chair makes sound business sense for a retailer that remains the third-largest supermarket group in the UK – behind Tesco and Sainbury’s – yet has experienced a torrid time in recent years.

Mr Leighton, a former salesman at Mars, was at the helm of Leeds-based Asda from 1996 to 2001 and is largely credited with turning the business around after he was recruited by another titan of retail, Archie Norman, who was chairman at the time.

Tesco, Asda and Sainsbury's warn of price hikes and job losses

The retailer’s fortunes changed dramatically, from verging on bankruptcy to enjoying a sustained and impressive trajectory of growth. The industry veteran was an integral member of the team that later steered Asda to a £6.7 billion sale to Walmart, the American multinational retail group.

Four years ago, in the pandemic year of 2020, Walmart sold a majority stake in Asda to private equity firm TDR Capital and also the Issa brothers – Mohsin and Zuber – who had built up the EG Group, a convenience and forecourts retailer.

Subsequent boardroom turmoil including the departure of chief executive Roger Burnley in 2021 and the ongoing – and, so far, unsuccessful search for his replacement – has not helped the retailer ride the storm.

With discount retailer Aldi now at number four in the UK’s top tier of supermarkets and threatening to nudge ahead Asda, it was clearly time to take decisive action. Earlier this month, Asda reported a drop in quarterly sales and warned of a £100 million hike in its tax bill following changes announced in the Chancellor Rachel Reeves’s Autumn Budget.

NatWest secures £2.5bn deal for Sainsbury’s banking arm

In announcing its results for the third quarter ending September 30, it reported a 2.5% decline in total revenues, excluding fuel, to £5.3bn, with like-for-like sales declining 4.8%, representing an improvement on the previous quarter this financial year.

Asda also pledged to improve the shopping experience for customers during the “Golden Quarter”, “investing £13m in store hours during Q4 to ensure more colleagues are on hand to support customers” during this busier period.

Meanwhile, it was also confirmed this month that Asda is now under the majority control of TDR Capital after Zuber Issa sold his shares in the supermarket and stepped down from his non-executive role on Asda’s board.

A statement on November 1 said: “Following the announcement of the proposed transaction in June 2024, Asda has confirmed that funds managed by TDR Capital LLP have completed the acquisition of Zuber Issa’s shares in the business. This brings the ownership of Asda to 67.5% by TDR Capital, 22.5% by Mohsin Issa, and 10% by Walmart Inc.”

Frasers calls for Mike Ashley to be appointed Boohoo CEO

Funds managed by TDR Capital now hold a 67.5% stake in the business while Mohsin Issa retains 22.5%. Walmart holds 10%.

Enter 71-year-old Allan Leighton, the seasoned retail veteran who famously used the phrase “going plural” when he left Asda and took on a series of non-executive roles. He succeeds Stuart Rose – another retail stalwart – who has served as chair since 2021.

Mr Leighton has led a number of UK and international consumer businesses. Je was president of Loblaw Companies, North America’s second-largest food retail business, spent nine years as chairman of The Co-op, and is the current non-executive chairman at Aberdeenshire-based brewer BrewDog.

He said: “Stuart has done an important job in helping to create a retailer with a presence in every format and I am delighted to be returning to the business which has always been a special place for me.

Quiz founder steps down amid moves to ‘recalibrate’ brand

“The potential for Asda now is significant, and my focus will be to work with the leadership team to help make Asda special for our colleagues and millions of customers.”

Lord Rose, 75, said it had been a “privilege to work alongside the Asda team over the past three years and to support the business through this period of transition”, adding: “Asda will benefit enormously from Allan’s experience of leading the business.”