* Roger Burnley to succeed Sean Clarke as CEO on Jan. 1
* Burnley returned to Asda as COO, deputy CEO last year
* Asda showing tentative signs of recovery
* Supermarket hurt by rise of discounters (Adds details, analyst comment)
LONDON, Oct 30 (Reuters) - Asda, the British supermarket arm of Walmart, has promoted head of operations Roger Burnley to be chief executive, tasking him with building on the firm's nascent recovery in the face of stiff competition from discount chains.
U.S. group Walmart, the world's largest retailer, said on Monday that Burnley, a 51 year old Yorkshireman, would succeed Sean Clarke as Asda president and chief executive on Jan. 1. Burnley is currently chief operating officer and deputy CEO.
Of Britain's big four supermarket players - market leader Tesco, Sainsburys, Asda and Morrisons - Asda has been hurt the most by the rise of German discounters Aldi and Lidl, as its traditional price advantage has been eroded.
Walmart has said Asda was too slow in responding to that competition and brought in Clarke to speed up change. In August, Asda reported its first quarter of underlying sales growth in three years and said the back-to-basics turnaround plan devised by Clarke and Burnley was working.
They have re-established Asda's price competitiveness in key areas such as fresh meat and vegetables, have improved the quality and availability of product ranges and have made its stores more attractive to shoppers.
"Roger's very widely respected both inside Asda and across the rest of the industry," said Bryan Roberts, global insights director at TCC Global.
"Turning what seems to be tentative stabilisation into a genuine recovery and actually regain some of the ground they've lost over the last few years is going to be a big challenge," he added.
Roberts said Burnley was likely to evolve Asda's strategy. "Longer term they need to work out what they are going to stand for in the market - is it around fun, is it around service, is it around being a family destination?"
Burnley, a former Sainsbury's executive, re-joined Asda in October 2016, three months after Clarke moved from Walmart China to lead the UK business.
Asda said it was always intended that Clarke would step down after about 18 months in the top job.
Roger was purposefully brought back to Asda to partner with Sean ahead of the transition to Roger taking up the position of CEO," said Dave Cheesewright, CEO of Walmart International.
"He and Sean have worked as a great team and Im really confident in Rogers ability to continue building upon our returning momentum," he said.
Clarke, a 21-year Walmart veteran, will lead Asda until the end of December. He will take some time out and will then remain engaged with Walmart.
Burnley, who first worked for Asda between 1996 and 2002, said the business was starting to realise its potential again.
"Seans focus on serving customers and simplifying the business has established a firm foundation on which we can build," he said. (Editing by Kate Holton and Mark Potter)