Asda owner Mohsin Issa: ‘I’m committed to getting this business back to where I know it can get to’

Asda co-owner Mohsin Issa could be forgiven for being a bit frosty. Asda today posted a strong set of annual results for 2023 when adjusted EBITDA after rent exceeded £1bn and sales ex-fuel topped £21.8bn, but headlines about the grocer have recently been more negative than positive.

Coverage has focused on the apparently deteriorating relationship between Mohsin and his brother Zuber Issa, the spiralling levels of debt heaped on Asda and the rash of strike action across its supermarkets. 

Despite all this, Mohsin Issa was upbeat when he spoke at Asda House in Leeds this morning. He addressed some of the speculation around his brother’s future as well as unveiling his long-term goals for Asda.

What’s the latest in the situation with your brother Zuber? Is he still part of the Asda business?

“I’m not really in a position to comment on behalf of my brother. All I will say on that is that I’m absolutely committed to Asda and the long-term success of the business.”

Has the speculation been a distraction from you running Asda day-to-day?

“Myself, Michael [Gleeson, chief financial officer] and the wider executive team have been completely focused on the day-to-day running of the business. What’s happening in the background will continue happening, but we’re laser-focused on doing what we need to do.

“We’re completely committed to getting this business back to where we know it can get to and, as you’ve seen with our investments, our focus is around growth”.

Will there be any impact on the business if there are changes to the ownership structure?

“What we committed to shareholders, ourselves and TDR Capital at the beginning may change, who knows? What I do know is that, for myself, I am absolutely committed to the business we acquired. If anything, my appetite has only increased since our acquisition. It’s actually a much better business than we thought it was when we bought it.”

You’re seeking to appoint a CEO, having essentially run Asda yourself for the last few years. Any update on your search?

“The search is well underway. It’s definitely an active search. My job when I came in was to look at the infrastructure, IT separation and building the new team, along with managing the separation from Walmart. Everything I set out to do is on track.

“What we need now is somebody who’s more focused on retail, and comes with a good pedigree around that and a real proven mentality.”

You’ve said in the past the goal is to overtake Sainsbury’s as the number two UK grocer. Is that still the goal and what’s the timeline?

“It was more of an aspiration for us. We will also do the right thing for the customer. We’ve invested significantly in convenience over the last few years, and we’ve been competing well online – achieving the second largest share there. If you look at the last 12 months, 11 out of the 12 we’ve been number two status for online.

“But that’s not the overarching, long-term goal. Day-to-day we’re just focused on delivering value for our customers and ensuring that we do the right thing for the business. It’s not number two at all costs, if you know what I mean.”

Asda Rewards has been very successful. What are your plans for the scheme, given inflation is starting to come down?

“Asda Rewards accounts for more than 50% of our sales now, since its inception in 2022. That tells us that customers absolutely love it, so we will continue to invest in that area.

“We see the way the scheme is structured as a key differentiator for us from our competitors. The pounds-not-points model is the real genius of the app – it’s very clear to the customer in terms of what the app delivers.”

George at Asda sales were more than £1.5bn last year. What are your plans to keep growing it?

“We brought in Liz Evans who has been running that business for nearly two years. She has brought experience into the team as well and subsequently, we’ve seen that translate into sales growth ahead of the market.

“That’s what we’re about. We’re about delivering value. Another big area of growth has been in school uniforms and childrenswear. That’s an area where we’re super strong and deliver great value for our customers.

“We’ll continue to invest and ensure that we’ve got differentiators in fashion with our competitors, using the right strategies and investments.”

Three Asda superstores have voted for strike action recently, and a fourth is voting on potential action. What have you been doing to bring that to an end?

“As you can imagine, we want to try and quash this at some point. We are working actively with our colleagues. We’ve got 151,000 staff and these strikes are concentrated in relatively small areas. 

“Our track record of investment with colleagues is at the top end. We definitely shouldn’t need a union to tell us what we need to do with our colleagues. They’re the lifeblood of any business and we need to do the right thing for them, and we’ll continue to do the right thing for them.

“If you’re paying top quartile and giving all the best facilities and services you’d expect, it’s easy to feel it’s a bit unfair [to be targeted]. But you never get dealt a fair set of cards, in life. You just need to get on with it and that’s what we are doing”.