Asda price could get lower under new boss, say analysts

Asda is getting a new boss
Asda is getting a new boss
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ASDA SHOPPERS could see a fall in prices following the news that Yorkshireman Roger Burnley is to return to the Leeds-based group as chief executive once Andy Clarke steps down.

Asda has lost its way over the past two years, losing customers to discounters Aldi and Lidl as its American parent Wal-Mart has pushed a focus on maintaining profits rather than allowing Asda to join in the recent supermarket price wars.

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Its three big rivals, Tesco, Sainsbury’s and Bradford-based Morrisons, have slashed prices and suffered falling profits in a bid to lure back shoppers from the discounters, a move that appears to be gradually working.

Wal-Mart International’s chief executive Dave Cheesewright has raised the prospect of further price cuts - saying that the US giant would look to “shift the balance in Asda from protecting profit to protecting share”.

Analyst Clive Black at Shore Capital said: “Assuming that Asda does something notable on the pricing front any re-balancing is likely to take some considerable time to resonate with customers given it is not operating in a vacuum.

“Asda has not respected the pricing, ranging or marketing of the discounters anywhere near effectively enough.”

Mr Burnley, who hails from Dewsbury, describes himself as a “born and bred Yorkshireman” and his family home is in Huddersfield.

He worked at Asda between 1996 and 2002, latterly as ​s​upply ​c​hain ​d​irector prior to which he was part of the core team responsible for integrating Asda into​ American parent​ Wal​-M​art following the acquisition in 1999.

​Mr Burnley will not be able to join Asda until October as Sainsbury’s is a direct competitor to Asda. The pair jostle for position as second and third biggest grocer after Tesco. With this in mind, Sainsbury’s has decided keep him to his 12 month notice period and he is currently on gardening leave.

Mr Burnley, whose father was a barrister’s clerk in Leeds, joined Asda in 1996, where he was appointed head of logistics development and then director of supply.

In 2002 he was head-hunted by Matalan where he was appointed supply chain director.