ASDA Abolish End-of-Day Price Reductions in All Their Stores: Aftermath 2

 

Amidst all the current government-inspired gloom we’re currently experiencing, a ray of hope shone out in the retail sector in late September with the news that the last of the Issa brothers had quit his executive role at ASDA.

Before we roll out the bunting, however, we should remember that the ‘terrible twins’ as they became known after their takeover in 2021, both retain significant involvement and influence in the business as non-executive directors, and one of them remains a part-owner. This is because the EG group, in which they both still have a major financial interest, continues to own ASDA. Zuber Issa sold his stake in ASDA in June ’24 but remains a non-exec. director of EG. Mohsin Issa stepped down as CEO of ASDA in September, and is now sole CEO of EG group. Stuart Rose has now assumed his responsibilities as ASDA’s CEO.

As I predicted in a previous blog, from a financial point of view, the Issas’ intervention in ASDA’s fortunes has been little short of disastrous, with the business sustaining a major loss in market share to the discounters and the other majors. The Issas' own EG group has also lost out big-time – despite a major expansion programme, the group has remained mired in debt, and has lost 60% of its asset value since 2021, mainly through sell-off to finance risky loans.

It is to be hoped that in time EG will divest itself of ASDA in order to raise more cash consolidate its debts – only then will ASDA stand any chance of returning to its former prominence and popularity as a community-minded UK food-retailing 'institution'. Hope 'springs eternal', as they say...

All in all, a good example of the ill-effects of unfettered venture capitalism on the British retail sector. 

Best of luck, Stuart…you may still need it !

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