It is a straightforward trade-off, critics argue. The takeover has left Asda stores starved of much-needed investment because it is having to divert hundreds of millions of pounds every year towards interest payments on the debts that its owners took out to finance their swoop.
“Asda’s woes aren’t simply the result of mismanagement. Servicing its debt mountain strips money from the business that should be invested elsewhere,” Nadine Houghton, national officer for the GMB trade union, said.
Stores have fallen into disrepair. Complaints about poor pay and long hours have led to an exodus of disenchanted employees, while disgruntled customers have left in their hordes, allowing Asda’s arch rivals to swoop in and hoover up market share on a previously unseen scale.
Since the sale in 2021, Asda’s market share has plunged from 14.8pc to 12.6pc, according to figures from Kantar. Not only has this allowed Tesco and Sainsbury’s to strengthen their grip on the grocery market, it has also raised the prospect of Asda losing its crown as Britain’s third-largest supermarket to German discounter Aldi.
As Asda’s plight has worsened, chaos has engulfed the boardroom, forcing the Issa brothers to deny rumours of a rift. Zuber has sold out and although Mohsin remains a shareholder, he has stepped down from the day-to-day running of the chain.
Meanwhile, a four-year-long search for a permanent chief executive goes on with no sign of it ending any time soon.
Even former chairman Lord Rose confessed to being “embarrassed” by the mess – a frank admission that appears to have persuaded TDR to pull the ripcord with the shock return of former boss Allan Leighton.
Feted as one of Britain’s top corporate fixers, Leighton made his name in the late 1990s when he and then-chairman Archie Norman, now chairman of Marks & Spencer, rescued Asda from insolvency. The pair dragged the chain back from the brink before orchestrating its near-£7bn sale to American retail giant Walmart.
Leighton’s return has sparked “euphoria” on the shop floor, a former senior employee said. “Allan going back and getting rid of Mohsin is like a double whammy”.
During his eight-year spell at Asda between 1992 and 2000, four as chief executive, turnover almost doubled from £4.53bn to £8.2bn, and profits jumped from £86.8m to £422.9m.
In his farewell letter to staff in 2000, Leighton said Asda had gone from “basket case” to being “one of the finest companies in the world”.
But more than 25 years after Leighton’s heyday at Asda, can those heroics be repeated? He is at pains to manage expectations, warning that a turnaround could take as long as five years, by which time he will be almost 77 years old.
