Asda boardroom shake-up could benefit rivals

The relocation by Asda's Chief Operating Officer (COO) to parent company Wal-Mart may not have grabbed the headlines in the supermarket industry on Friday, but one analyst believes that the move has positive read-through for Asda's rivals in the UK.

The relocation by Asda's Chief Operating Officer (COO) to parent company Wal-Mart may not have grabbed the headlines in the supermarket industry on Friday, but one analyst believes that the move has positive read-through for Asda's rivals in the UK.

Judith McKenna, who has worked for Asda for many years, took up the COO position in July 2011 but is to move to Bentonville, Arkansas, to work as Wal-Mart's Executive Vice President Strategy and International Development.

Asda, one of the Big Four supermarkets in the UK (with Sainsbury, Morrisons and Tesco), had a 17.3% market share in the 12 weeks to December 23rd, down from 17.5% a year before, according to data this week by Kantar Worldpanel.

Analyst Dave McCarthy from Investec's Investment Banking & Securities division said this afternoon that he regards McKenna as "top drawer", so while this is a loss to Asda, it is good news for the competition. "We credit her with some significant improvements at ASDA, as well as her keeping a tight financial control of that business," McCarthy said.

"Judith oversaw the successful conversion of Netto stores to ASDA (these stores have reportedly doubled sales) and is held in high esteem in the trade. Many suppliers have commented on the improvements to in store standards since her appointment to COO. Ms McKenna is one of a rare breed, a Finance Director that understands retailing and is in touch with the consumer."

He said that Wal-Mart appears to share this opinion too and could be prepping her for "bigger things in the future".

McCarthery said the impact of her departure from Asda "will not be obvious nor immediate, but as we have said before, judge a decision on how the competition view it.

"We believe that Asda's competitors will be pleased to see McKenna depart for the US, so bad news for ASDA, good news for Morrisons in particular."

Recommended

Three top-notch Asian stocks to buy
Share tips

Three top-notch Asian stocks to buy

Professional investors Adrian Lim and Pruksa Iamthongthong, managers of the Asia Dragon Trust, pick three of their favourite Asian stocks to buy now.
23 Sep 2022
Why you should short this satellite broadband company
Trading

Why you should short this satellite broadband company

With an ill-considered business plan, satellite broadband company AST SpaceMobile is doomed to failure, says Matthew Partridge. Here's how to short th…
23 Sep 2022
Share tips of the week – 23 September
Share tips

Share tips of the week – 23 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
23 Sep 2022
Momentum investing – and why price matters more than anything else
Investment strategy

Momentum investing – and why price matters more than anything else

The recent fashion for momentum investing, with investors piling into expensive growth stocks, is nothing new, says Merryn Somerset Webb. And the dang…
21 Sep 2022

Most Popular

Beating inflation takes more luck than skill – but are we about to get lucky?
Inflation

Beating inflation takes more luck than skill – but are we about to get lucky?

The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank…
26 Sep 2022
The pick of this year's best-performing investment trusts
Investment trusts

The pick of this year's best-performing investment trusts

Market conditions haven’t been easy, but these investment trusts have delivered strong growth, says David Stevenson.
23 Sep 2022
Share tips of the week – 23 September
Share tips

Share tips of the week – 23 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
23 Sep 2022