Asda forced to wait after hiring Sainsbury's executive

LONDON: Supermarket Asda, the British arm of Wal-Mart, has lured a top executive from rival Sainsbury's to be its new chief operating officer, although it could be a year before he can start work.

Asda said on Tuesday it had appointed Roger Burnley, currently Sainsbury's retail and operations director, to the COO role.

Burnley will be deputy to Asda Chief Executive Andy Clarke, with whom he worked with in a previous spell at Asda from 1996 to 2002 and before that at clothing and homewares retailer Matalan.

Sainsbury's said Burnley had left with immediate effect and commenced 12-months "gardening leave" as per the terms of his contract, given that Asda is a direct competitor.

Asda declined to comment when asked if it will attempt to reduce the 12 months notice period, merely stating "it will be some time next year" before Burnley joins.

All of Britain's so called "big four" grocers, market leader Tesco, Asda, Sainsbury's and Morrisons, have been hurt by a price war, as they attempt to stem the loss of shoppers to discounters Aldi and Lidl, and the impact of commodity-led deflation.

Shares in Sainsbury's were down 1.9 percent at 266 pence at 1028 GMT.

Analysts immediately speculated that Burnley's move will make him a prime contender to succeed Clarke. The chief executive has been under pressure following the worst trading performance in Asda's recent history.

Burnley has spent nearly a decade at Sainsbury's and was promoted to his current role in April last year.

"Adding Roger to Asda's executive team further strengthens the board which, I believe, is now one of the most experienced and capable in the industry," said Clarke.

"These are times of unprecedented turbulence for our industry," he added.

Asda's sales performance has deteriorated significantly in 2015, with the firm posting like-for-like sales declines of 3.9 percent in its first quarter and 4.7 percent in its second quarter.

The second quarter outcome, Asda's worst performance in the 16 years it's been owned by Wal-Mart, was described by Clarke as the firm's "nadir".

Sainsbury's said the recruitment of a successor to Burnley was under way. In the interim CEO Mike Coupe will assume responsibility for the role.