Allan Leighton was adamant. Just two months ago, Asda’s then-executive chairman insisted that his position as the sole leader of the discount grocer’s turnaround plans would not change any time soon.
It had been rumoured that Asda was on the lookout for a chief executive to bolster its efforts to return to its heyday, but Leighton told City AM that any changes of leadership were “not imminent”.
And when any change of leadership finally arrived, he said, it would come from within Asda’s existing top team. “The preference would be to appoint a CEO from inside the company, and we have a very highly talented group of executives, and my hope is that somebody would emerge from the group,” he had said.
Just weeks later Leighton has already handed over the top job – to an outsider. David Potts, a former boss of rival Morrisons, took the reins as chief executive role with immediate effect, prompting Leighton to step back into a non-executive chairman position.
This apparent U-turn was “unexpected but not entirely surprising,” independent retail analyst Catherine Shuttleworth said. Asda has been searching on-and-off for a chief executive since the departure of Roger Burnley in 2021.
Petrol station tycoon Mohsin Issa, who bought the grocer from US retail giant Walmart for £6.8bn in 2021, was Asda’s boss until September 2024 but the group has been without a chief executive since Leighton’s appointment as executive chairman.
While Leighton said he was looking inwards to find his successor after exhausting his external search, the Asda chairman told the Times that he had been pursuing Potts all along.
“I have been patient. I have got the right person,” he said. “His experience is exactly what we now require for the next stage of our transformation and beyond and it will be great to work with him.”
Asda and Morrisons fight for recovery
Potts’s appointment comes only two years after Leighton returned to Asda to lead its comeback. He had been the grocer’s marketing director and later its chief executive during its 1990s heyday, when he and Marks & Spencer chairman Archie Norman oversaw its blockbuster sale to Walmart.
Asda’s current owners, private equity firm TDR Capital, looked to Leighton to inject some much-needed energy into the grocer in November 2024, when it was facing an existential threat from the insurgent discount supermarket chains Aldi and Lidl.
Known for his penchant for showmanship, Leighton once rode into an annual managers’ conference by revving into the auditorium on a Harley Davidson motorcycle.
Potts, on the other hand, is an “operational leader,” Shuttleworth said, who will likely be focussed on the minutiae of shoppers’ in-store experience. The move will see him reunited with finance chief Michael Gleeson, who he worked with during his stints at both Tesco and Morrisons.
Though Potts will take charge of the day-to-day running of Asda, the supermarket chain said Leighton will remain involved in the group’s long-term planning, as it attempts to mount a charge up the grocery sector’s market share league table.
Asda is currently the UK’s third-largest grocer, holding 11.5 per cent of the market, though this share has dropped from the 11.8 per cent it held this time last year, as Aldi and Lidl threaten to add to their 10.5 and 8.6 per cent shares.
Potts takes up ‘difficult’ task
Josh Holmes, head of research at Retail Economics, said: “The appointment may have surprised people, but there’s a clear commercial logic to it. Potts’s early turnaround at Morrisons centred on competitive prices, better availability and stronger service. Those are precisely the areas Asda needs to get right.”
There are similarities between Asda and Morrisons, its closest rival. Both are private-equity owned, both have faced intense competition from the German discounters in recent years and both are being weighed down by billions of pounds of debt.
Though Asda slumped to a £989m pre-tax loss last year it did manage to slim down its debt pile by £500m, to £3.1bn. Morrisons, however, saw its net debt rise last year from £7.1bn to £7.5bn.
Morrisons has made more progress towards its turnaround than Asda, having posted 15 consecutive quarters of sales growth under the stewardship of Rami Batiéh, Potts’s successor.
“Potts inherits a difficult job. Asda has lost ground while competitors have continued to move forward,” Holmes said. “It needs to rebuild its reputation for value and give customers a better, more reliable shopping experience. That takes sustained investment, which is made all the harder when you’re also managing a heavy debt burden.”
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