Inside Asda's leadership shake-up: What's really happening at UK's third-largest grocer

In a not-so-well planned move‚ Lord Rose exits Asdaʼs chairman role ahead of his 2025 timeline‚ with Allan Leighton stepping in as replacement (whose past includes saving the chain back in the 90s)

The super-market chain tried to present this switch as a well-thought out plan but the news got out before they could make it official: which doesnt look good for anyone. Its worth noting that Rose recently told The Telegraph he felt “embarrassed“ by the stores performance

The real issue isnt about whos sitting in the big chair — its about money. Since the buy-out by TDR Capital and the Issa brothers about 3 years ago‚ Asdaʼs been dealing with some serious cash-flow problems:

• Near-£6bn debt load
• Interest costs hit £441m last year
• Previous year saw £396m in interest payments
• Market share dropped from 14.8% to 12.5%

The company did some fancy financial foot-work earlier this year moving around £3.2bn worth of debt. While they pushed back major payments until 2030; the new deal comes with much higher interest rates — jumping from 3.25% to about 8% on half the debt

Meanwhile competitors like Tesco‚ Sainsburyʼs and the german discount stores are getting stronger everyday. The truth is Asdaʼs spending more time juggling numbers than focusing on selling groceries; which is what they should be doing

The chain still makes money (£180m pre-tax profit last year) but theres a bigger picture here — all that cash going to banks could be used for better things like fixing up stores or cutting prices for shoppers. With a short-term credit deal ending in just 9 months; the money-shuffle continues