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Why Is Wal-Mart UK Unit's CEO Standing Down?

Asda, Wal-Mart's UK supermarket chain that is the country's number two operator by market share, last night said its CEO is to stand down.

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AP

The news comes ahead of a visit by senior Wal-Mart management and a number of US investors on Thursday and increases uncertainty about the direction the group's operations in Britain will take next.

Andy Bond, who just two months ago outlined a "new chapter for future growth" after a disappointing performance for the retailer over the holiday season, will remain at the group as chairman on a part time basis and help find his replacement as CEO.

Bond says there was nothing "sinister" behind his decision to go, but investors are questioning whether he has been pushed aside due to a clash with management in the US over strategy.

Shares in Home Retail , a general merchandise chain that is big in DIY in the UK, saw its stock jump Monday on a report that Asda was considering a bid due to frustration at its inability to take a bigger share of food retail market from sector leader Tesco .

Competition fears would likely scupper any attempt by Wal-Mart-owned Asda to snap up smaller rivals like Sainsbury or Morrison , and Asda has been behind the curve getting into smaller convenience sites like its two major rivals.

Wal-Mart Chief Executive Doug McMillan said in a statement that he was happy with Asda's performance in 2009 and thanked the group's 170,000 UK staff for their contribution over the last 12 months.

But it is thought operational mistakes over the holiday season, including failing to prepare properly for some unusually cold weather, had had been viewed negatively by management in Bentonville, Arkansas.