Asda has parted company with its chief executive after only 18 months, despite recent signs that a trend of falling sales, amid a price war with discounters Lidl and Aldi, was being arrested.
The supermarket chain, whose US parent, Walmart, is the world’s largest company by revenue, said Asda’s chief executive, Sean Clarke, would be replaced by his deputy, Roger Burnley.
Despite the fact that Clarke has led Asda since July last year, the Walmart chief executive, David Cheesewright, said the handover of power had always been in the company’s plans.
“Roger was brought back to Asda to partner with Sean ahead of the transition to Roger taking up the position of CEO,” he said.
“He and Sean have worked as a great team and I’m really confident in Roger’s ability to continue building upon our returning momentum.”
He added that Clarke would “remain engaged” with Walmart after stepping down and taking some time out.
Burnley worked for Asda from 1996 to 2002 and made his return to the company in October 2016, after he was poached from the rival Sainsbury’s, where he was retail and operations director.
Asda reported its first quarterly rise in sales for three years in the three months to the end of June.
Burnley will be expected to continue implementing the turnaround plan started under his predecessor that Asda hopes will keep its performance on an upward path.
The company said in September that it had cut 300 jobs, axing more than one in 10 of its 2,500 head-office staff as part of an aggressive cost-cutting drive.
It also changed the job descriptions of a further 800 staff and is reported to be considering thousands more redundancies or imposing reduced hours at underperforming stores.
The cutbacks come amid a protracted price war that has engulfed Britain’s highly competitive supermarket industry.
Clarke, who will step down in December, was leading efforts to revive Asda’s fortunes and appeared to have stopped a period of long-term decline.
Established supermarkets struggled to cope with the rapid expansion of Aldi and Lidl in the UK, which forced them to cut prices on many everyday items.
Asda, which had benefited from a reputation for bargains, has suffered more than most from the emergence of the German discounters.
Bryan Roberts, the global insights director at TCC Global, the retail marketing firm, said Clarke and Burnley had jointly devised a plan that seemed to be turning the company around, with the latter now entrusted with cementing that progress.
“Turning what seems to be tentative stabilisation into a genuine recovery and actually regaining some of the ground they’ve lost over the last few years is going to be a big challenge,” he said.
“Longer term, they need to work out what they are going to stand for in the market – is it around fun, or is it around service? Is it around being a family destination?”
