- Sainsbury’s boss Coupe feels no “personal pressure” over Argos battle
- Coupe reiterates acquisition is not a must-do deal as he hails “rounded” fourth-quarter growth
- He says the switch from promotions to EDLP resonated with customers as like-for-likes edged up
- But he remains cautious on the prospect of future growth after “volatile” quarter
Sainsbury’s boss Mike Coupe has shrugged off suggestions that he will be under pressure if the grocer does not complete a deal for Argos.
The supermarket giant has been handed a “put up or shut up” deadline of Friday by the Takeover Panel in its bid to acquire Argos owner Home Retail Group.
Sainsbury’s had initially approached Home Retail with a £1.3bn proposed offer last month before South African retail conglomerate Steinhoff swooped in with a £1.4bn proposal. Neither business has made a formal offer at this stage.
But as Sainsbury’s reportedly considers increasing its offer to £1.5bn – a position Coupe refused to comment on – some analysts have suggested that his position as chief executive could be under threat if it is ultimately out-bid by its South African rival.
“I don’t feel the personal pressure. It’s important that we do the right thing for our business and we’ll continue to move forward if we don’t do the deal”
Mike Coupe, Sainsbury’s
Speaking after unveiling the grocer’s first increase in quarterly like-for-like sales for more than two years, a defiant Coupe said: “We see it as an acceleration of our existing strategy, but you can also see in the underlying numbers that we have delivered in this quarter and indeed improving performance in every quarter for the last financial year that we are moving forward on a number of fronts.
“We’ve said all along this is not a must-do deal, it’s not at any price. If it doesn’t happen, we will get on and execute as we’ve done brilliantly well.
“So I don’t feel the personal pressure. It’s important that we do the right thing for our business and we’ll continue to move forward if we don’t do the deal.”
EDLP bears fruit
Sainsbury’s like-for-like sales edged up 0.1% in the nine weeks to March 12, as Coupe insisted the retailer was “winning on a number of fronts.”
He said the move away from promotional activity to an EDLP model had resonated with customers, while entertainment releases including Adele’s new album 25 and the latest James Bond film Spectre drove entertainment sales up by around 10%.
But despite hailing “rounded” growth across all areas of the business, including grocery and clothing, Coupe refused to get carried away when asked if this was the start of a sustained period of like-for-like gains.
“We’re not going to make ourselves a hostage to fortune. Who knows what will happen in the next quarter,” Coupe warned.
In reference to Asda’s sales struggles, he added: “Certainly one of our major competitors characterised something as a nadir not that long ago and probably lived to regret it.
“So I’m certainly not going to get carried away on predicting how the next period of time will go, not least because this is usually one of the most volatile quarters because of the potential for either good weather or not so good weather.
“Let’s not get carried away too much on predicting the future because in the end there are still some of the headwinds we have seen in the industry, not least a continuation of the deflationary cycle.
“We’re not going to make ourselves a hostage to fortune. Who knows what will happen in the next quarter”
Mike Coupe, Sainsbury’s
“However you cut it though, in the last year we have seen an outperformance relative to our major competitors. We’ve seen market share growth, transaction growth and volume growth.
“We would have some level of confidence given the rounded nature of the performance that that would continue.”