By James Davey

LONDON (Reuters) -British supermarket group Asda, which has been losing market share, said its chairman, veteran retailer Stuart Rose, will assume the executive responsibilities of co-owner Mohsin Issa, who is stepping back from his leadership role.

The UK’s third largest grocer has underperformed rivals, including market leader Tesco and No. 2 Sainsbury’s, over the last year, with monthly data consistently showing it to be the industry laggard.

Data published on Wednesday from market researcher NIQ, showed Asda’s sales fell 5.5% over the 12 weeks to Sept. 7 year-on-year, and it lost 1.3 percentage points of market share over the year.

Last month, Rose, 75, who is a former CEO of Marks & Spencer and a former chairman of Ocado, told the Telegraph newspaper he was embarrassed by Asda’s performance.

Asda has been without a chief executive since Roger Burnley left abruptly in 2021.

While the search for a permanent CEO continues, it said Rose would work alongside Rob Hattrell, a partner at private equity firm TDR Capital, who was already a director on the supermarket group’s board.

Asda is owned by Issa and TDR Capital, while U.S. giant Walmart, its previous owner, retains 10%.

“I have decided now is the right time for me to step back from my oversight role at Asda,” said Issa.

He will remain a non-executive director but focus on his role as sole CEO of petrol forecourt operator EG Group.

Rose praised Issa for launching into the growth market of convenience stores, introducing a loyalty app now used by more than six million customers, and laying the foundations to deliver “a world-class IT infrastructure.

Analysts say Asda has been weighed down by the cost of servicing the debt it took on when Mohsin and Zuber Issa and TDR Capital bought 90% of Asda from Walmart in a 6.8 billion pound ($9 billion) deal that completed in 2021.

In June, TDR agreed a deal to gain majority ownership by acquiring Zuber Issa’s share.

($1 = 0.7571 pounds)

(Reporting by James Davey; editing by Sarah Young, Paul Sandle and Barbara Lewis)