Asda’s new boss will need to turn around the brand, not just its sales

Asda’s CEO Andy Clarke is standing down to make way for the boss of parent company Walmart’s China operations as it looks to turn around declining sales and consumer perceptions of the brand.

Sean Clarke will take over on 11 July. Most recently CEO at Walmart China he actually started his retail career at Asda back in 1996. He then went on to hold a number of global roles, including as COO in China where he was responsible for marketing, as well as merchandising, operations and supply chain.

Asda has had a difficult year as the continued success of the discounters Aldi and Lidl and the resurgence of Morrisons and Tesco ate into its sales. Like-for-like sales fell by 5.8% over the Christmas 2015 quarter, its worst performance in history. Clarke called that Asda’s “nadir” but results were even worse the following quarter and have struggled ever since.

Yet it is not just Asda’s sales that need a jumpstart. Its brand is also on the decline.

According to YouGov BrandIndex, its ‘Index’ score – a measure of a range of consumer perception metrics including quality, value and reputation – fell by a statistically significant 2.8 points to 13.7, putting it ninth in a list of the top UK grocers behind all its big four rivals as well as Lidl, Aldi, the Co-op, Marks & Spencer and Waitrose.

Its ‘Buzz’ ranking – a measure of the positive and negative things said about the brand – was down by 4.2 points, again statistically significant. Even its value ranking, where Asda has typically outperformed, has suffered, falling by 4.7 points.

Sean Clarke has been tasked with “repositioning” the business in a “very competitive market place”. That will involve a big investment in price to maintain its market share. But it will also need to look at the brand and what it stands for – something that has become lost in the price war.

Current CEO Andy Clarke will remain as an advisor at Asda until the end of 2016. Asda will need him to pass on his expertise in running a UK grocer. Sean Clarke will also be helped by the imminent arrival of Roger Burnley from Sainsbury’s.

He was hired as COO last year but has had to see out his 12-month notice period. He will now take on the role of deputy CEO as well.

David Cheesewright, CEO of Walmart International, says, “Actively managing our global business portfolio is a key element of our international strategy, and we must have the right talent in place to lead our businesses through times of change.

“Sean is one of our most experienced global executives, and through his leadership we will build upon the momentum of Project Renewal to reposition Asda in a very competitive market place.  I’m also excited about Roger coming back to Asda, as we view him as a top talent and a future CEO.

“Together with the existing Asda executive team, Sean and Roger will serve as an incredibly powerful team to lead our Asda business. Their complementary skills and combined expertise in the U.K. retail market and globally brings an unrivaled breadth of retail knowledge to Asda.”

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