The MT Interview: Andy Bond

With his whippet-like energy, Asda's boss is a tough operator who doesn't like to lose (especially at arm-wrestling). He enjoys a respectfully distant relationship with US parent Wal-Mart and is relishing the prospect of taking the bargain brand upmarket.

by Chris Blackhurst
Last Updated: 31 Aug 2010

Andy wants to show me something. He grabs my elbow and pulls me into the aisle of chill-cabinets. 'There, look at that,' he says excitedly, pointing at a cardboard carton of packets of fresh pasta. 'That's what I mean by innovation. Instead of a colleague taking ages filling the shelf with individual packs, he or she just takes the box out, rips it open and puts it there. It means they've got more time to fill other shelves, so their efficiency is increased. Oh, before you ask, when it's empty, the carton is sent off to our recycling centre.'

We're in the Asda store next to Clapham Junction in south London. It's the middle of the afternoon and the place is teeming. Andy Bond, the CEO, introduces me to Andrew, the manager (everyone wears badges saying 'Always Happy to Help' with their first names - surnames don't count in Asda). Andrew is extremely proud of the fact that sales at this branch are up 30% year on year. Footfall has also increased 8%. Nationally, Asda is now the number two in groceries by market share, and has just beaten Primark to become the UK's second-favourite clothing store by volume of sales, thanks to a sterling performance from its George label. Its financial performance is more opaque, as parent company Wal-Mart does not reveal the numbers for its international subsidiaries.

Andrew, a Northerner, used to work at Tesco. 'I was a manager. I had a list of things to do every day - I didn't have the chance to be entrepreneurial. Here, I've been allowed to focus on my shop. I'm focused on a plan for getting product onto shelves, providing excellent service for customers and communicating and motivating colleagues. At Tesco, people just came in to get their wages. Here, there's no hierarchy. Everyone is closer to everybody else.'

Bond is nodding urgently. When I laugh and say Andrew is a plant and must be rehearsed, he claims not. He's amused but not very - there's no room for cynicism in Asda.

We're off again. In the next row, Bond grabs a plastic bag. It's the new sous vide range of Belgian vacuum-packed dishes. 'This is brilliant,' he says, turning it over lovingly. 'It's lamb shank and it's as good as Gordon Ramsay's, trust me. This sous vide method means all the freshness is sealed in. We're selling loads, as more and more customers are choosing to eat in.'

Andrew observes that this branch used to have shoppers mostly filling baskets; now they're loading up trolleys. It's true that the trolleys are groaning. It's a mixed area ethnically and this branch has got sections devoted to West Indian, Polish, Irish and Asian staples - a smart ploy. As we linger, a West Indian grabs his favourite brand and an Irishman in a suit declares his delight that Asda sells Chef Sauce, a bottled sauce like ketchup and a delicacy in his native land.

Bond is on a roll: 'We're cheaper than our main competitors - that's proven - and our stores sell more per square foot than they do. We're the retailer of choice for BBC Children In Need. We've taken the water out of a lot of cleaners so they're concentrates and come in smaller bottles. They take up less volume and don't consume as much energy to transport.'

His enthusiasm is infectious. Over by the bakery, we meet Omar, in charge of making the bread. He recognises Bond. 'How's it going?' asks the boss. 'We're 25% up on last year,' says Omar, beaming. 'We're the best department. It's what I'm here for - to increase sales.'

An assistant is introduced to us. He has been to the annual jamboree for shareholders in Wal-Mart, Asda's giant US parent. 'Did we sing karaoke together?' asks Bond. 'Yeah,' he replies, laughing. 'It was the best week of my life.'

Each party at the gathering at Wal-Mart's HQ in Bentonville, Arkansas had to introduce an act from their country to wow the crowd. Brazil thought it had trumped everyone with a World Cup footballer. Bond outdid them with the pop group Keane. 'Who else was playing?' inquires Bond, sounding as though he's in a music quiz. 'J-Lo and The Eagles,' they both say in unison.

Andrew the manager has another tale to tell. 'I came here from Colindale. My wife worked for Tesco. She asked if they could find her something near here. They said no, so she left.'

You notice other things. There are no signs mentioning the opposition; go into a Tesco and there are price comparisons galore. Here, there are generous offers down the middle of the store. There's plenty of staff - this outlet employs 400 and it is by no means large. They all seem busy and friendly. There are no gaps on the shelves.

The aisles are wider than in other supermarkets - deliberately so, says Bond. The messages are simple. The emphasis is on value for money. There's upmarket alongside the cheapest or, as Andrew puts it, 'good, better and best'.

There's an earnest zeal about Bond and his colleagues that I've also noticed when I've been in a Tesco but never quite come across in a Sainsbury or a Waitrose: a quasi-religious feel to it all. Partly, I suspect, it's the US parentage, with its regard for family and community, staff bonding and pride. Partly, it's the nature of what is being sold, which is all for the home, for people of all ages, creeds, ethnic backgrounds and classes - just like a broad, welcoming, inclusive church.

Then there's the man at the top. If you wonder what Bond is like, don't think of his suave but dark 007 namesake. Think more Tony Blair, someone who is classless, casual and informal and has time for everyone, who can do caring compassionate one minute and tough the next.This is someone who describes himself as 'energetic, abrasive, a clear communicator, blunt, impatient and not particularly empathetic'.

Later, as we sit in the store's upstairs office, Bond says: 'I've got to win.' He even challenges me: 'If you want to arm-wrestle, we will have an arm-wrestle and I will win. I hate losing - I can be very destructive on myself if I do. I'm the most competitive person you've ever met.'

What happens if his football team - he plays five-a-side every week - loses? 'We don't.'

He smiles. 'I don't back off, bloody hell, no. I'm not a great footballer. I played rugby at school and I was a good runner.'

Self-doubt is not something Bond does. When he was at Salford University, he captained the rugby team. Also there was Ieuan Evans, who was playing for Llanelli and went on to captain Wales and play for the Lions. Evans was a winger. Bond picked himself on the wing, and the great Welsh player had to switch to fly-half.

There's a pause. Should I roll up my sleeve and go for it, man-to-man, forearm-to-forearm? I'm broader; he's got the look of a whippet. I could win, but there's a glacial immovability about him that says, come what may, he will not lose.

Gulp. Hey, better to sit and chat instead. Where does it stem from, this intensity? Straightforward, really: from his childhood.

He was born in 1965, so he is only 43. He grew up in Grantham, Lincolnshire, the hometown of Margaret Thatcher. 'Dad was a plumber, Mum a nurse. I failed the 11-plus - it was Mrs Thatcher's town, so they still had the grammar school.'

He was devastated but he fought back. Within a year, he transferred from his secondary modern to the grammar. 'Most successful people can trace their desire to win back to failure in their teens. My driving force is discipline and a sense of personal failure.' He went to Salford University to study engineering. 'I got a First.'

Bond joined British Gas as a graduate trainee, then moved to heavy goods manufacturer Hopkinsons, now part of Weir, for five years.

'It was the late 1980s. Every engineering company seemed to be going under. My career prospects were severely shortened, so I went to Cranfield to do an MBA. I won the top award.'

First-class degree, MBA prize... a pattern is beginning to emerge. He was contacted by a recruitment consultancy looking for bright young people to join Asda. It was April 1994 and Asda was the hottest company around. Run by Archie Norman and Allan Leighton, it had transformed the UK supermarket sector.

Much of what Asda did was revolutionary: name badges for everyone, staff huddles in the aisles, workers wearing baseball caps, free use of a Jaguar for a month to the employee who sold the most, meetings without chairs, to keep them short. Asda was a stamping ground for a generation of execs who went on to bigger things: Justin King (Sainsbury's), Andy Hornby (HBOS), Richard Baker (Boots), Ian Gibson (BPB), Ian McLeod (Halfords), Andy Clarke (Iceland), Paul Mason (Levi's) and Phil Dutton (Matalan).

Bond was interviewed by Norman. 'I was inspired by him.' He joined as a marketing manager, soon promoted to own-label development and buying. 'At the end of 2000, I was in the right place at the right time. I asked the chief executive Paul Mason if there was any chance I could take over George (Asda's clothing label). My parents and my wife's parents were in the Midlands and I was in Leeds at head office, and George was run in the Midlands. I wanted to move, so the children could see more of their grandparents.'

It was a 'cheeky' request. He had no background in fast fashion. Two months after he tabled his wish, George Davies, the founder of George, resigned. Bond got his job.

It was a big step, following the iconic Davies and having to compete with high-street labels. He knew 'absolutely nothing' about fashion.

But what he did know was his customers and the importance of giving them what they wanted. 'Food retailing is more front-end focused. It's about customers and categories - someone else supplies the food. Clothing is more end-to-end - making the clothes as well as selling them. I'd spend a day a week in the clothing factories.'

That appealed to the engineer in him. 'I knew about factories, I knew about product development - I felt really comfortable with that.'

Davies, it was said, intuitively knew what women wanted. Does he? He tips his head back, laughing. 'I don't. But I do know about retailing and marketing. I can't say if one dress is better than another, but I have got an insight into the customer and how they think.'

Bond 'did a lot of research' into customers and hired 'great people, like Kate Bostock from Next (now womenswear supremo at M&S), who produced a product list'.

He turned in results that would have done an experienced fashion chief proud. 'It was an amazingly successful period. Sales went up over 70% and we more than doubled profits.' But it was luck as much as judgment, he says. Under his tenure, George overtook M&S as the UK's largest fashion retailer by volume. Bond made waves. When he started, George was selling a pair of jeans for £14.97; he lowered the price to £3.

After four years with George, he moved back to Leeds, to be COO, managing the stores and distribution centres. 'It was a big decision for me and my family. No guarantee was offered that I'd get the top job, but I really trusted Asda.'

Bond expected to be deputy to Tony DeNunzio for at least two years. 'I was beginning to re-engage with the company and head office again. But then, after six months, Tony resigned. It was a real shock to the system.'

He got the CEO post in early 2005. 'I signed the contract on the last day of my thirties. I was a 39-year-old chief executive for a few hours.'

It was not an auspicious time. Tesco was pulling away and Sainsbury had claimed the second slot. Asda was losing market share and the masters in Bentonville were unhappy. 'The first six months were very hard,' recalls Bond. 'The business was not in good shape. We were the poorest performer of the big four groups, we were missing all our targets, we were under-performing the market and we had a novice chief executive.'

It was also, he says, very lonely. 'As CEO of Asda, I don't have a chairman and a board to report to in this country. It was a hard six months. I really felt the sense of isolation.'

Could he not talk to Norman and Leighton? 'Not really, they're not personal coaches. I did talk to all sorts of people, but in the end it came down to me. I was in charge.'

He saw his role as covering 'three buckets': strategy, people and execution. 'We've improved in all three. One, we have a more customer-based strategy. I took us back to our roots, where we were the lowest-priced, broader-based and more friendly. I now have colleagues who will serve you well - and it's not so much their efficiency you notice as their friendliness.'

He continues: 'Two. I'm very pleased with our people. With one exception, every single person who reports to me has been changed.'

And 'Three, Archie and Allan taught us that you can't separate direction from detailed execution. We've got a controlled, performance-based culture. We're obsessed with the excellence of our delivery - we're obsessed with detail.'

This last one occupies most of his days. 'I sit back and look at all three, but I don't spend too much time on strategy and people.'

Asda is delivering alright. The latest TNS quarterly figures show its sales 9% up year-on-year - well ahead of Tesco, with only a resurgent Morrison's coming close. Sainsbury's has been seen off, leaving Tesco firmly in Bond's sights.

Obviously, being cheapest helps as the recession bites? 'We were already getting Asda into great shape, we'd got a great buzz going, before this,' says Bond. 'We'd got our premium range and we were broadening our appeal - and sales were coming through. But clearly, if you're touted as the lowest-price retailer that helps.'

Tesco, of course, may dispute that tag. Bond shakes his head. 'The Grocer named us irrefutably as Britain's cheapest big retailer and that is good enough for me.'

What does he think of his peers? 'The super-competitiveness is good for us all. I see Terry (Leahy) at industry do's. I'm full of quiet admiration for him; he runs a superbly good business. The difference between me and Terry is that he runs a global business; I'm part of a global business. Justin (King, of Sainsbury's) is doing a good job. They all are. The result is that the UK has great food retailing, if not the best in the world.'

Next to his store in Clapham is a Lidl. It was packed. Does the rise of the discounter bother him? He shrugs. 'The media love that story, how there's a Rolls-Royce or a Porsche in the Aldi or Lidl car park, how everyone is going there. In the scale of things, it's very small. It cannot hope to offer as many low prices as Asda - it sells 1,000 items, when one of our stores can sell 25,000.'

How, though, is he going to grow the business? The UK is a small country saturated with supermarkets. Mergers have been mooted - the City wonders if Asda could buy Woolworth's, I suggest. 'Acquisitions are very heavily regulated,' he counters. 'Ever since Morrison's bought Safeway, we've been very constrained.'

There is, though, more scope in non-food, he admits. 'It would be unhealthy businesses that go bust; there must be much that is wrong with them. It would be hard work to turn them round. I think I'd prefer, genuinely, to sit on the fence.'

He disputes the claim that there are enough supermarkets (Asda has 350 branches). Only 20% of the population can choose to shop at all four chains, he says. 'That means they're not benefiting from competition. All four together offers competition. There is a disjoint between local planning and the need for competition.'

This year, Asda will open 10 superstores, 'so it's not like we're unable to grow. We are constrained, but we're also experimenting with smaller stores of less than 3,000 feet.'

He's not rushing to go down the convenience route, however. 'I'd never say never, but they cost a lot to open, they're expensive to service and there are problems with the logistics.'

One of the things people don't appreciate about Asda, he says, is that most of its stores are not out-of-town. 'Most are within towns - they were built close to the centre on brownfield sites. Take Grantham - my Mum walks to the Asda to do her shopping.' Does she tell him what she thinks of his work? He smiles. 'Shall we say, she gives her opinion on a regular basis.'

Another way of growing the business is from the inside, by improving performance. 'We cannot get complacent. We exist in a very competitive environment - we have to constantly look to improve our offering. We mustn't forget, either, that we have to work with our suppliers as well as our customers. Around 700 people work in our buying floor - they must balance the cost and make sure they do the right thing by the suppliers. People accuse the supermarkets of being hard on suppliers, but how is it to our benefit to be hard on them?'

He's also got £2bn of costs in the business. 'I'm always tough on costs,' he says - as if I would doubt it for a second.

What does he get out of being part of the mighty Wal-Mart? 'In general merchandise, a lot of what we sell is bought by Wal-Mart. In some areas, like toys, it's virtually everything. In clothing, there's very little. It is able to buy fabric, such as denim, in very large quantities, but then we'll get the jeans made ourselves. Food is much more regional and local. We bring a lot in from Europe, but 60%-70% of our canned and fresh food is made in the UK.'

The Wal-Mart influence is strong in other areas, such as IT systems, but much of what he does, he says, is up to him. 'I've got total freedom in what I buy and in my presentation. I run Asda. It's a key plank of the Wal-Mart philosophy to let the heads of its businesses manage. Wal-Mart is the majority shareholder - it's not unlike a private equity owner.'

Before Wal-Mart, he says, 'Asda modelled ourselves on Wal-Mart. We were more Wal-Mart than Wal-Mart! We're still the lowest-price retailer, we treat people well, we give them a share in the business, and we treat our suppliers and the environment well. That's the Wal-Mart ethos - and it's ours as well.'

His boss, Mike Duke, vice-chairman of Wal-Mart's international division, comes to the UK at least once a year. Bond speaks to him once a month and goes to Bentonville four or five times a year. He describes Duke as 'my personal coach. I can seek his advice on anything.'

Yes, but what happens if things aren't going smoothly? 'Wal-Mart genuinely believes in giving power to the local management,' he replies.

Do the Americans not crawl over the business? 'No.' Then he adds, smiling: 'If it's not happy, it can always get new management - it is the shareholder.'

In the US, Wal-Mart does not recognise trade unions, something that exercised the GMB union here, which thought Asda was going the same way. It didn't. 'Wal-Mart takes a view which says we can have country-specific relationships. Tesco is the same, by the way - it doesn't recognise trade unions in the US but it does here.'

He pauses. 'I feel very comfortable with the balance. I like being a private company - I can get on and run the business. We're also part of a much larger public group. I'm not a puppet of Wal-Mart. I like that ambiguity.'

Bond offers me his hand. For a moment, I suspect he wants to arm-wrestle. But, thank goodness, he's grinning, bidding me farewell.

FOUR CHALLENGES FACING BOND
1. To keep up the pressure on arch-rival Tesco
2. To see off the discount retailers like Lidl
3. To broaden Asda's appeal to upmarket shoppers
4. To continue not losing at anything.

BOND IN A MINUTE

1965: Born Grantham, Lincolnshire. Attends The King's School, Grantham and studies engineering at Salford University

1986: Graduate trainee at British Gas. Joins engineering firm Hopkinsons but quits to study for an MBA at Cranfield

1994: Recruited by Asda as a trainee marketing manager

2000: MD of Asda's George clothing range

2004: Chief operating officer of Asda

2005: Appointed CEO of Asda

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