Asda’s new chairman has admitted the supermarket chain is ‘struggling’ and has warned profits will fall further amid an investment to improve stores.
Allan Leighton, who stepped into the role of chairman in November, said it was ‘quite obvious’ that changes needed to be made to improve efficiency.
‘It’s pretty difficult to say the business isn’t struggling when its sales are down five per cent,’ said the former Post Office chairman.
Mr Leighton will be behind a proposed ‘substantive and well-backed programme of investment’ in a bid to rebrand and improve stores.
‘Our job is to fix it but not just to fix it. We have to build it, reset it, turn it into what it was,’ he said last week.
The change comes amid years of decline for the company and co-owner Mohsin Issa stepped back from his role as head of operations last year over concerns about declining customer numbers.
Although Mr Leighton has not specified the size of the investment, the supermarket has said the planned spending will result in a ‘material reduction’ in profits, The Telegraph reported.
And Mr Leighton said: ‘The way I think about it is that sales are disappointing and profits are OK-ish.’
The supermarket has a journey of improvement ahead of it, the chairman suggested, with plans to lower prices and improve availability.
Mr Leighton pointed to his aim of making Asda a highly competitive rival in the industry by making significant moves rather than cutting corners.
He said the planned spending spree will be ‘probably the biggest investment in Asda on Asda price and rollback since I did it before. So, it’s that significant.’