Supermarket boss's move upstairs shocks City - Telegraph

Supermarket boss's move upstairs shocks City - Telegraph
Andy Bond's surprise move gets tongues wagging, says James Hall



Only seven weeks ago, Andy Bond was outlining his vision for Asda over the next five years.

Sitting in the plush London offices of the supermarket's financial PR advisers, the retail chief executive outlined "a new chapter for future growth" at Asda. It was an energetic and punchy performance, which was hailed by City analysts as combative yet sensible.



Which is why yesterday's announcement by Asda's US parent company Wal-Mart that it is looking for a replacement for Mr Bond in the chief executive's role came as such a surprise.

After five years at the helm of the UK's second largest supermarket chain, the sporty redhead will step up to become the part-time chairman of Asda's executive committee. The "move upstairs" shocked observers, not least because on Thursday Mr Bond is due to update analysts about Asda's strategy at its head office in Leeds.

"It is a considerable surprise to us. While we may be wrong, it is difficult to see how such change in management was anticipated by Wal-Mart or Asda's executive committee given the proximity of this investor event," said Clive Black, food retail analyst at Shore Capital.

As news of Mr Bond's departure spread, observers looked to Asda's recent history for clues about why he was leaving his job. Based on the evidence, many concluded that he could have been forced out of the role by his Arkansas-based paymasters.

Asda suffered a poor Christmas compared to rivals: sales were sluggish (largely due to snow) and the chain's all-important market share had slipped. It was hit by heavy promoting from Tesco and J Sainsbury, and had also been knocked by a resurgent Wm Morrison. Further, the retailer recently attracted controversy when a City analyst claimed that Asda's management had told suppliers that the chain had become "boring", a charge that Asda denied.

"Asda has not been performing well," said one executive close to the chain.

However speaking yesterday after the announcement, Mr Bond dismissed all the talk, saying that there was nothing sinister about his decision to move on.

"Let's not dance around the handbags. The question you want to ask is have I fallen out with them? Categorically not," he said.

He said that there has "been a discussion over a number of months" about his new role.

"After 16 years at the company and five as chief executive it was the right time to do something else within Asda but also develop ideas outside the company," he said.

As yet he has "no specific" plans as to what he will do externally. "I am 'going plural', in the words of [former Asda chief executive] Allan Leighton," he said, adding that his priority will be to help Asda embed his replacement as chief executive. After that, he will move to a part-time basis at the retailer. He said that he will not take on another chief executive's roll.

"I am going to do a number of things and spend a little time thinking what they are. I have loved my time at Asda and if I wanted to do a big CEO's job I'd continue to do what I am doing," he said.

Mr Bond said that the retail giant would hardly have created the new chairman's role for him if they had had differences of opinion.

However the nature of the relationship between the biggest retailer in the world and its UK outpost has been a constant source of speculation. To the shoppers that throng Asda's aisles, the retailer is British through and through. On the surface, very little has changed since the chain was bought by Wal-Mart, the US giant, for £7bn in the summer of 1999: its prices are still low and its staff are still decked out in lurid green. However observers believe that the relationship can be fraught with its own frustrations, the chief of which are a perceived lack of strategic and financial autonomy. For example, Asda has always been limited in the level of detail that it has been able to disclose in its financial results. And strategic decisions have always had to go through Wal-Mart's HQ in Bentonville, Arkansas.

Mr Bond said that he has "not had to compete" with Wal-Mart's other divisions in India or China for resources. He said that the Wal-Mart mothership has never been anything but supportive: "There has never, ever been a time when I have asked for capital and been refused. Ever."

A former colleague of Mr Bond, who asked not to be named, speculated that the ambitious retail executive could simply be looking for new challenges. He also said that the recent underperformance clouds a strong track record at Asda.

"I am not completely surprised. Andy has done the most superb job of delivering his first five-year plan. He has been there 16 years and he is still in his mid 40s. He had a choice – either he took a deep breath and delivered the next five-year plan, or he concluded that it's time for change."

Last year Mr Bond was connected with the job running Marks & Spencer, a role that eventually went to Marc Bolland, the Morrisons boss. "That might have set him thinking about what he really wants to do," said the former colleague.

Other observers also praised the work that he had done. Mr Black said: "Andy Bond has been a demonstrable success at Asda. His work in charge of the George [clothing] brand and subsequently as overall leader deserves much acclaim; indeed in early 2009 we felt that Asda stores had rarely been in a better groove, exuding confidence."