Martin Flanagan: US bosses pull ranks on Asda chief

Asda has suffered seven quarters of falling sales. Picture: Lisa Ferguson
Asda has suffered seven quarters of falling sales. Picture: Lisa Ferguson
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Asda, surefooted at the cut‑price end of food retailing for so long, has seemed to lose its touch in recent times. The stark clarity of chronic sales falls has been mixed with an apparent fuzziness of tactical response.

Against this topsy-turvy backcloth, with Shakespearean overtones, nothing in his life as Asda chief executive has become Andy Clarke like the leaving of it. A lack of pragmatic clarity has dogged the process.

Only last week it appeared in a magazine interview that Clarke was grooming incoming chief operating officer and ex-Sainsbury’s retail and operations director Roger Burnley as his successor. The timeframe was vague, however, and the outgoing chief executive referred somewhat confusingly to still personally being part of a “journey” at Asda.

But US parent company Walmark has unceremoniously pulled rank on him. The transatlantic top brass are shipping their own man in, current China head Sean Clarke, and his hapless namesake will depart next month. He will retain advisory status until the end of this year, but that seems vaguely fig leaf‑like.

READ MORE: Walmart replaces Andy Clarke as Asda chief executive

The incoming Clarke, who has also held top roles for Walmart in Japan and Canada, becomes Asda chief executive on 11 July. Burnley will instead take up the position of deputy chief executive and chief operating officer. He probably feels like someone who has lost a tenner but found a fiver.

Asda’s woes have not been all the outgoing Clarke’s fault. Its performance in the first four of his six-year tenure was decent.

And he has been unlucky at the timing of the growing strength of the discounters Lidl and Aldi, with value-proposition Asda always likely to be the most obvious target in the usurpers’ crosshairs.

But patience was wearing thin Stateside even before the UK subsidiary revealed a seventh consecutive quarter of falling sales last month – down 5.7 per cent and with declining footfall to boot. Tesco, Sainsbury’s and Morrisons twisted the knife with improving underlying sales.

That followed a 5.8 per cent sales decline over Christmas, which was Asda’s worst ever quarterly performance. Unhelpfully for Clarke, a personally affable chap, that came about nine months after he had called a sales crash in spring 2015 as the “nadir”. It wasn’t, and he has paid the price.