Asda's Leighton Critiques Labour: Retailers Face Policy Headwinds

Allan Leighton ran Asda during the first flush of Blair's New Labour, when government ministers courted business leaders and growth was gospel. Nearly three decades later, he's back chairing the same supermarket—and his assessment of the current Labour government pulls no punches. Westminster has become 'more and more difficult' to work with, he told a retail industry conference this week, suggesting the party that once bent over backwards to engage with commerce has lost interest in the relationship.

The criticism carries particular weight given the source. Leighton was Asda's chief executive from 1996 to 2000, a period when Tony Blair and Gordon Brown made business engagement a centrepiece of Labour's economic strategy. His direct comparison between then and now amounts to more than typical corporate griping about regulation. This is a retail veteran who experienced Labour's pro-business era firsthand declaring that something fundamental has shifted.

'Most of government was pretty business-friendly' during his first stint at Asda, Leighton said. That's changed.

Firms now face 'a lot of constraints that are not of their own making', he argued, pointing to rising National Insurance contributions, minimum wage increases, packaging fees, energy costs, and incoming workers' rights legislation as a mounting burden on retailers already operating on thin margins.

Enjoying this article?

Get stories like this in your inbox every week.

Join the Community

A pattern of retail sector alarm

Leighton isn't an isolated voice. Tesco chief executive Ashwin Prasad warned last month that Sir Keir Starmer is 'sleepwalking' into a joblessness epidemic, directly linking government policy to potential job losses. The British Chambers of Commerce (BCC) responded to Rachel Reeves's spring statement by urging further action, noting that GDP growth is expected to remain 'well below 2 per cent a year until 2030' whilst unemployment rises.

The emerging pattern suggests retail leaders see operational headwinds building precisely when the government claims to be laser-focused on growth. Reeves has positioned her chancellorship around unlocking investment and boosting economic activity. Yet the sector that employs roughly 3 million people and accounts for around 5 per cent of GDP is sending increasingly sharp signals that policy and rhetoric have diverged.

What's interesting here is the specificity of Leighton's complaint. He's not objecting to individual policies so much as diagnosing a broader breakdown in how government relates to business. Labour used to 'go out of their way to try and engage' with firms, he said. That active partnership—the phone calls, the consultations, the sense of being inside the tent—has evaporated.

The credibility question cuts both ways

Leighton's critique faces an inconvenient fact: Asda is the only major UK supermarket currently showing year-on-year sales declines, according to Kantar WorldPanel data. Tesco, Sainsbury's, and Morrisons have all reported growth. Market share has slipped. The turnaround Leighton returned to lead in 2024 is, by his own admission, a 'three- to five-year' project that has only just begun showing 'signs of progress'.

That raises questions about whether this is genuine alarm about government policy or partial deflection from operational failures. When your business is underperforming whilst competitors navigate the same regulatory environment more successfully, blaming Westminster becomes a convenient narrative. Minimum wage rises and enhanced workers' rights, after all, apply equally to Tesco and Sainsbury's—neither of which is shrinking.

The argument that businesses face constraints 'not of their own making' also deserves scrutiny. Policy interventions like minimum wage increases and employment protections exist precisely because unregulated labour markets produced outcomes the electorate rejected: widespread low pay, zero-hours contracts, and job insecurity.

Leighton's rose-tinted recollection of the 1990s regulatory environment also glosses over a simpler explanation: the regulatory burden was genuinely lighter across the board then, reflecting a different economic era. E-commerce barely existed. Climate obligations were minimal. Data protection was rudimentary. Comparing today's operating environment to 1997 is comparing fundamentally different economies.

What Labour's business problem reveals

Despite these caveats, the drumbeat of retail sector criticism presents a genuine problem for Labour's economic strategy. The party won power partly by promising competent growth-focused governance after years of Conservative chaos. Six months in, major business voices are questioning whether that's what they're getting.

Shevaun Haviland's BCC response to the spring statement was politely scathing: the economy is 'heading in the right direction' but needs 'further acceleration'. With inflation forecasts not accounting for Middle East disruption to oil and gas supplies, and nearly half of firms intending to expand this year, the gap between business ambition and government support has become a talking point.

Whether Labour can rebuild the active engagement Leighton remembers from the Blair years whilst simultaneously pursuing worker protections and addressing climate obligations is the central tension. The 1990s model of business partnership was forged in different circumstances—lighter regulation, pre-financial crisis faith in markets, and fewer competing social demands on government policy.

The retail sector's warnings will intensify pressure on Reeves to demonstrate that her growth agenda amounts to more than rhetoric. With unemployment expected to rise and trade remaining weak, according to Office for Budget Responsibility forecasts, the window for proving that Labour can manage both business confidence and worker protections is narrowing. Leighton expects his Asda turnaround to take years. The government may not have that long to show its economic approach can deliver.

More articles by Ross Williams