When former Asda boss Roger Burnley told the supermarket's 145,000 employees he was leaving earlier than planned after the business changed hands, well wishes poured in.
Staff said they were “proud” to have been part of the “green machine” and “Roger Burnley’s barmy army” following his leadership during the pandemic.
Accelerating his departure was the arrival of new owners – the billionaire Blackburn-based Issa brothers, who bought the grocer for £6.7bn from US giant Walmart.
Burnley, who left last month, had been at the helm since 2018 and in March signalled plans to leave next year. The 55-year-old originally said he would remain in his post until a successor was identified.
Several sources said that although there was no bad blood between him and Mohsin and Zuber Issa, a stark contrast in operating styles soon became apparent and his role untenable.
The brothers’ approach is widely described as entrepreneurial and the culture fast-moving, by those who know them.
Retail veteran Lord Stuart Rose, chairman of the Issas’ petrol station firm EG Group, describes the pair as a “very rare species” for having “come from nothing” and built up a sprawling business empire.
By the early 2000s, they had saved up enough money to buy their first petrol station in Bury, Greater Manchester.
Now they are one of the biggest forecourt and convenience store operators in the world – their empire spans 6,000 petrol stations – and own fast food chain Leon.
One Asda insider says: “They’re used to operating in entrepreneurial businesses – they want to get on with it, they want to move at pace and that’s a bit of a clash of culture in terms of how the business works and that’s proven difficult for some [at Asda].”
Burnley was followed out the door last month by Anthony Hemmerdinger, chief operating officer, and Preyash Thakrar, interim chief customer officer and former strategy chief. Hemmerdinger was regarded as the most likely internal successor to Burnley.
In April, finance chief Rob McWilliam also stepped down, though headhunters say he was only there to steer the grocer through the takeover.
Under its previous 22-year Walmart ownership, Leeds-based Asda ticked all the boxes of a well-oiled corporate machine and insiders say it is time for a mix-up.
“The people who went there were a bit more vanilla,” one industry observer says. “There have to be changes, Asda can’t continue the way it is, it’s just going to lose market share so it has to be different. Too many people have a vested interest in Asda carrying on the way it is. That’s what the Issas are trying to get their head around, they believe in a trade-led recovery.”
Asda trails leader Tesco and Sainsbury’s in market share, with German discounters Aldi and Lidl – both going after the grocer’s price-conscious customers, breathing down its neck.
Earlier this month it reported a 0.7pc drop in like-for-like sales, excluding fuel, in its second quarter from April through June. The supermarket said the fall reflected the exceptional sales levels during the first lockdown a year ago, with the figure up 3.1pc on the same period in pre-pandemic 2019.
Now, as Asda gears up for its first post-pandemic Christmas, recent departures have raised eyebrows amid retail pundits, with Britain’s third-largest supermarket left lacking a chief executive to steer it through its most lucrative time of the year. The exits also left wider leadership gaps, with only four executives on its board, according to its website.
The company says it is committed to hiring more independent non-executive directors and has made a string of management appointments including Meghan Farren, chief customer officer; Liz Evans, who will run fashion division George; and Carl Dawson, chief information officer.
An internal and external search for Burnley’s successor is still under way, although Mohsin – described as “very work-orientated” by his sister-in-law Asma in a rare interview with BBC Radio 4 – has assumed the de facto leadership role for the time being.
The 50-year-old is said to spend most of the working week in Leeds, but one insider said he was merely providing additional support for the existing management team.
The pair’s mother, Zubeda, who initially worked in the textile industry when she and her late husband moved over to the UK from India, is understood to be particularly proud her sons have bought the grocery chain. Asma also revealed that “they actually hate being dubbed the billionaire brothers, they try to avoid the media as much as possible”.
But when it comes to business, some say the new owners are keen to shake things up quickly. They say there is no longer room for debate, and there isn’t a “clearly laid out strategy and a plan”.
“There is a desire to push through on a few things they were very keen on, which I think aren’t necessarily the right things to be doing,” says one source.
During a recent court hearing as part of a wide deal to take over Caffè Nero, which has not materialised, Mohsin said he did not need to ask for permission from the [EG] board before pursuing deals. Shedding some light on their modus operandi, he said: “I do not need ratification or approval at any point.”
What is known is that the brothers are rolling out nearly 230 Asda stores on petrol station forecourts with the grocer supplying products on a wholesale agreement to EG Group, which will own and operate each site on its forecourts.
When they bought the company, the Issas said they would target the convenience sector, while growing Asda’s large stores and online business.
Fraser McKevitt, head of retail at data firm Kantar, welcomes their move: “There is a huge opportunity in [convenience] to tap into the 3.7bn take-home grocery trips of less than £20 made every year.”
While some critics argue they lack the nous to efficiently run the vast sheds of products Asda is known for, supporters point to recent tie-ups with the likes of fashion brand Missguided to sell its goods in 100 stores as well as Rawr Beauty, New Look, Maximuscle, My Protein and Lee Wrangler. The initiatives are meant to attract more customers to large stores.
While their management style may differ from Asda’s norm over the past two decades, one City source says the Issas are the “taskmasters” of partnerships after inking deals with fast-food chain KFC, Starbucks, Subway and Greggs.
Any change of ownership is typically received with scepticism, but with the Blackburn brothers at the helm of Asda, the time is ripe for modernisation.
As one City source adds: “The future of retail is what Amazon is doing. If you’re going to go up against Amazon you’ve got to think differently.”