The promotion of Asda’s chief operating officer Judith McKenna to join parent company Walmart last week was met with dismay by analysts. Retail Week takes a look at the implications of the move.

The departure of Judith McKenna from Asda, revealed on Friday, will be seen as a blow to the Leeds-based supermarket. The highly-rated chief operating officer - who has been with Asda for 15 years, progressing through property and finance positions including chief financial officer - has been promoted to become executive vice-president for strategy and international development at Asda’s parent Walmart in Bentonville, Arkansas.

The news of her exit from Asda House concerned City analysts who have credited McKenna - who became chief operating officer in July 2011, replacing current Wickes boss Simon King – with much of the grocer’s recent strong performance.

McKenna has been credited with steering the acquisition and conversion of the 193 former Netto stores - and reportedly doubling sales from those stores - which have helped Asda take on areas previously dominated by Morrisons. Her face has become synonymous with Asda worldwide as McKenna frequently presented to shareholders in Bentonville representing one of Walmart’s most successful and innovative businesses.

The softly-spoken McKenna has overseen an improvement in store standards; the growth of the retailer’s multichannel business as it looks to compete with online grocery market leader Tesco; and fronted Asda’s quarterly Mumdex report as the retailer increasingly strives to become an authority on the nation’s economy. Given Asda is not quoted in the UK, the reaction from the City suggests her departure will not just move the dial at Asda but in the grocery market as a whole.

Investec analyst Dave McCarthy says: “This is a loss to Asda, but is good news for the competition, as we regard Ms McKenna as top drawer. We credit her with some significant improvements at Asda, as well as her keeping a tight financial control of that business.”

Shore Capital analyst Clive Black says: “Ms McKenna is a popular executive and a considerable talent that we believe has positively contributed to cohesion and operational performance of Asda in recent years.”

Black notes that her departure will quell speculation that McKenna was in line for the top job at Asda and leaves the grocer with a considerable management reshuffle. Mark Ibboston becomes retail director responsible for distribution, retail and online grocery operations. Karen Hubbard now takes charge of the Asda Direct non-food online division as well as the small supermarkets while Stephen Smith, who joined Asda last year from Walmart as chief marketing officer, takes on its embryonic financial services business alongside his existing responsibilities.

Asda chief executive Andy Clarke regularly talks of the benefits of Walmart’s ownership following the acquisition in 1999 which include selling Asda developed products through Walmart overseas and leveraging buying power to lower prices – the multinational’s core strategy. However, it could be argued that the loss of smart executives including McKenna, former chief operating officer David Cheeswright, former finance director Rob McWilliam and former chief marketing officer Rick Bendel to its parent hinders Asda’s own development.

McCarthy concludes: “Any weakening of the management team at Asda is good news for the competition. The impact will not be obvious nor immediate, but as we have said before, judge a decision on how the competition view it. We believe that Asda’s competitors will be pleased to see McKenna depart for the US, so bad news for Asda, good news for Morrisons in particular.”

Meanwhile, Asda is the only large grocer not to have reported on Christmas trading and Black forecasts the grocer, which will reveal full-year performance on February 21, has had an average Christmas. On the 2013 strategic noticeboard, he pins communicating its low price credentials, broadening its appeal, building on its ecommerce proposition, potentially launching in the Republic of Ireland and building up its financial services business.

Whatever Asda achieves in 2013 it will have to drive forward without the considerable nous of McKenna.