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This is an abridged version of Ian’s full analysis, which you can read here

Asda looks to be in a very bad way.

Its market share has fallen to 12.6%, down from 13.7% a year ago, which is an astonishing fall from grace.

What happened?

In short, a great deal of upheaval.

In October 2020, while the pandemic was still raging, Walmart sold a majority stake in Asda to the private equity company TDR Capital and to brothers Mohsin and Zuber Issa.

With Walmart maintaining a strategic 10% stake in Asda, allowing the retailer access to its buying power, there was initial optimism.

But the financial engineering that underpinned the deal – the buyers raised £2.75bn towards the purchase by selling a bond secured against Asda’s property assets and put just £780m of their own capital at risk – meant that Asda became a heavily leveraged business as a result.

The warning signs

An early warning sign came when, in August 2021, the well-regarded Roger Burnley stepped down as Asda’s chief executive after reportedly falling out with the brothers over strategy.

Asda failed to appoint a successor despite making overtures to several big names in the industry and, in early 2022, the search was suspended. The search is now back on again, led by headhunters Spencer Stuart, amid reports that a £10m-a-year salary is on offer to the right person.

A run of criticism

In the meantime, Asda’s high borrowing has weighed on it, something which did not go unnoticed by the Competition and Markets Authority which, in an investigation last year into whether motorists were being over-charged for fuel, singled out a loss of competitiveness at Asda – previously seen as the industry leader when it came to cutting petrol and diesel prices.

There was further embarrassment when, in July last year, the Business Select Committee criticised the brothers for their “opaque” accounting after an excruciating hearing during which Mohsin Issa declined to answer several questions on whether Asda had increased its profit margins on fuel since the takeover.

Stability was further undermined by constant speculation that the brothers had fallen out.

This was strenuously denied but, in June this year, Zuber Issa agreed to sell his 22.5% shareholding in Asda to TDR – giving the latter a controlling 67.5% stake. Reinforcing the sense that the brothers were going their separate ways, EG Group sold its remaining UK forecourts to Zuber for £228m, while the latter stepped down from EG Group’s board in the process.

Many of the problems with Asda’s operational performance have been laid at the door of Mohsin Issa and his comparative lack of experience in supermarket retailing.

There have been several clashes with unions over staffing levels in the business, with long-standing employees complaining at having to do too much, while a push to disentangle Asda’s IT systems from those of Walmart also created upheaval.

Losing patience

Trying to keep the show on the road and bring order to the chaos have been Lord Rose of Monewden, Asda’s chairman since 2021 and Michael Gleeson, the chief financial officer.

But even Lord Rose, a lauded figure in retailing for his leadership of Marks & Spencer in the 2000s, appears to be losing patience, telling the Sunday Telegraph at the weekend: “I am going to be perfectly honest with you. I’ve been in this industry for a long time and I am slightly embarrassed. I won’t deny that.

“I don’t like being second, third or fourth. And if you look honestly now at the comparative numbers of Kantar or whatever index, we are not performing as well as we should be. And I don’t like that.”

Declaring that Mohsin needed to relinquish day-to-day running of Asda, Lord Rose added: “We need a full-time, fully experienced retail executive to come in… we always said Mohsin was a particular horse for a particular course.

“He is a disrupter, an entrepreneur, he is an agitator. We’ve added a significant number of stores and we’ve changed a lot, but it now needs a different animal.

“In the nicest possible way, Mohsin’s work is largely complete.”

Hopeful signs

All is not yet lost for Asda.

It has a number of new high-profile recruits due to join in coming months. And it also appears to be listening more to its customers, with Mr Gleeson announcing last week an increase in the staffing of checkouts.

It is impossible to avoid the sense, though, that it desperately needs a full-time chief executive and quickly.