Wal-Mart To Name China Chief As New Asda Boss

The owner of Asda is finalising plans to name a shock replacement for the chief executive of Britain’s third-biggest supermarket chain as it prepares to target rivals with a fresh price blitz.

Sky News has learnt that Wal-Mart, the world’s largest retailer by profitability, is poised to parachute in Sean Clarke, who runs its operations in China, as Asda’s next boss.

The move would stun Britain's retail industry, which has been expecting for months that Roger Burnley, who resigned from J Sainsbury (Other OTC: JSAIY - news) last year to become Asda’s chief operating officer, would replace the current chief executive Andy Clarke.

That succession plan appeared to be confirmed last week when Andy Clarke said in an interview that Mr Burnley was “a great leader” and would be “a great colleague” when his period of gardening leave expires later this year.

Sean Clarke – who is not related to the current Asda boss – is not unfamiliar with the British retailer.

He worked at Asda in the early part of his career as its commercial finance director, before taking roles in Canada, Germany and Japan.

He then moved to China, where he initially worked as Wal-Mart’s chief operating for the country, before being promoted to the role of president and chief executive of the 400-store business.

If he is named as Andy Clarke’s successor at Asda, he will face a huge challenge in turning around the performance of the business amid fierce competition from traditional and emerging rivals.

The timing of the change is unclear, although sources indicated on Sunday that Wal-Mart could make an announcement as soon as this week.

It (Other OTC: ITGL - news) is also unclear whether Andy Clarke was aware of Wal-Mart’s deliberations when he made the remarks last week about Mr Burnley.

Asda has been struggling for some time, with its status as the most competitively priced major food retailer in the UK threatened by the rapid growth of Aldi and Lidl.

David Cheesewright, a senior Wal-Mart executive, told shareholders last week that the company’ was disappointed with Asda’s performance.

“With the US business recovering, you can expect that we will shift the balance from protecting profit to protecting share,” he said.

That would entail a price war which would affect the entire UK grocery market at a time when Tesco (Xetra: 852647 - news) is in the foothills of a recovery, Sainsbury’s is completing the takeover of Home Retail Group, and Wm Morrison is also in turnaround mode.

Andy Clarke has run Asda since 2010, meaning that when he steps down, the UK’s four largest food retailers will all have changed their chief executive since 2014.

Those changes reflect the increasing urgency with which their boards and shareholders are attempting to tackle rapid structural changes in the market, with the launch of Amazon’s Fresh-branded service presenting another huge headache for them.

It is unclear where the change of boss at Asda leaves Mr Burnley’s plans to join the business given that he was expected to replace Andy Clarke relatively soon after joining.

The chain’s current chief has embarked on an initiative called Project Reset, which is aimed at improving store formats, price competitiveness, service and availability.

Asda declined to comment on Sunday.