LONDON (Reuters) - Struggling British supermarket Asda said on Saturday veteran retailer Allan Leighton would return as executive chairman, more than two decades after he served as CEO when he turned around the business before selling it to Walmart ( WMT ).

Britain's third largest grocer, now majority owned by private equity firm TDR Capital, has been losing market share to rivals, including industry leader Tesco ( TSCDF ) and No. 2 Sainsbury's ( JSNSF ), according to monthly data.

Leighton will succeed fellow veteran Stuart Rose, who has been chair since 2021 and in September assumed the executive responsibilities of co-owner Mohsin Issa.

Earlier this month, Rose said Asda had "slightly lost the plot", highlighting inadequate store standards, poor product availability and prices not as sharp as they have been in the past. But he said the business is fixable.

At the same time, Asda reported a 4.8% fall in third quarter like-for-like sales and warned that measures in the new Labour government's budget last month would cost the group 100 million pounds ($125 million).

Leighton served as Asda CEO from 1996 to 2001, driving a turnaround with then chairman Archie Norman before the business was sold to Walmart ( WMT ) for 6.7 billion pounds. Leighton also served as president of Canadian retail group Loblaw ( LBLCF ) and chairman of Britain's Co-op and the Royal Mail.

Asda said Rose will remain on the board to ensure an orderly transition before stepping down.

"I am delighted to be returning to the business which has always been a special place for me," Leighton said.

Gary Lindsay, managing partner of TDR Capital, said Leighton's "experience and understanding of Asda will stand us in good stead as he leads the business into the next stage of its development".

Walmart ( WMT ) retains a 10% stake in Asda.

($1 = 0.7980 pounds)