Asda overtook Sainsbury to become the UK's No 2 grocer

Tony DeNunzio is leaving in the next few weeks to "pursue other business interests", the firm announced.

He was with Asda during the supermarket chain's years of market share expansion, leading to its takeover by US giant Wal-Mart.

Asda is now searching for a replacement for Mr DeNunzio, who will become chairman at Dutch retailer Vendex.

The 44-year old is also a non-executive director of furniture and kitchens group MFI. His career began at consumer products group Unilever and he has held positions at L'Oreal and PepsiCo.

Expanding fortunes

Asda - owned by US retail giant Wal-Mart - is the UK's second largest supermarket chain behind Tesco.

There's a huge risk that Wal-Mart will come and interfere more. It's not in their culture to stay away Richard Perks, Mintel analyst

Over the past five years, Asda has overtaken Sainsbury's as the country's No 2 supermarket and now has a 16.9% share of the UK grocery market. Tesco currently takes the lead with a 29% share.

Recently Asda's expansion plans have been stepped up, with a pledge to open at least 15 new outlets and create 6,000 jobs this year.

With Mr DeNunzio at the helm the retailer transformed its George clothing brand into the UK's top clothes seller by volume.

Retail analyst Richard Perks of Mintel International said the news would be a blow to Asda. The supermarket chain accounts for about 10% percent of Wal-Mart's group sales.

"Anything like this is bad news. There's a huge risk that Wal-Mart will come and interfere more. It's not in their culture to stay away. But Asda has succeeded on being left alone," Mr Perks added.

Dutch retailer

Mr DeNunzio's next corporate home, Vendex, is the largest non-food retailer in the Netherlands and was bought last July by private equity groups KKR, Cinven, Permira and AlpInvest.

"We are delighted to have Tony at the helm," said Henry Kravis, a founding partner at KKR.

Mr Kravis praised Mr DeNunzio's "world-class leadership" and marketing skills and said he was the "ideal" chairman to lead the strong team at Vendex.

Vendex is a smaller business but holds opportunities for Mr DeNunzio to make money from its equity options.

"In a management buyout like this, there's great scope to make money out of share options when the thing goes public again," Mintel's Mr Perks said.

Responding to Mr DeNunzio's resignation, John Menzer, chief executive of Asda's parent Wal-Mart, said Wal-Mart was "greatly appreciative" of Mr DeNunzio's contribution to the company.

Mr DeNunzio was awarded a CBE in the 2005 New Year's Honours list.