Incoming Sainsbury’s chief executive Mike Coupe said his first priority is to ensure a smooth handover but has signalled that he may make key strategic changes to the business when he takes the reins in July.
Coupe, 53, who takes over from Justin King on July 9, said this morning: “Sainsbury’s has a very successful formula and I hope to continue on that path. But the market is more competitive than ever, the market dynamics are changing and we may have to think differently at some point.”
The big four are facing considerable challenges in the tough climate. Hard discounters such as Aldi and Lidl are gaining market share while grocers at the top end such as Waitrose continue to grow.
The larger supermarkets are being squeezed and habits are changing with top-up shopping and shopping around now commonplace. King said at the start of this year that trading over Christmas was “the toughest he had known in his 30 years of retailing”.
Sainsbury’s delivered its 36th consecutive period of like-for-like growth over Christmas but analysts have warned that this growth may come to an end in the increasingly tough food sector.
Coupe, currently group commercial director, said he has worked “closely” with King for almost 10 years and said he hopes for “continuity” as “the strategic decisions we made in those years we made collectively”.
He added: “I hope for a very smooth handover and will take the business forward as I need to.”
He told Retail Week: “When it comes to July 9 I may talk differently, but at the moment it is business as usual as we manage the transition. I will talk to you about my to-do list in July.”
King, the ‘grandfather of grocery’, surprised the City when he announced he was stepping down today. He leaves after ten years of reshaping the business under his ‘Making Sainsbury’s Great Again’ plan.
Chairman David Tyler described King as an “inspirational” leader who delivered “one of the most striking turnarounds”.
Tyler said: “Sainsbury’s was close to being on its knees when Justin took over. The shelves were unstocked, morale was rock bottom, market share was falling and profits were wholly inadequate.
“He restored customer trust, reinstated the energy in our business and reignited the company’s values, making Sainsbury’s a great place to work and shop.”
Shore Capital analyst Clive Black described King as a “very accomplished leader” and said King’s greatest achievement is that he “steered Sainsbury’s to consistent market share gains involving positive like-for-like sales growth through a deep consumer recession and materially broadened the reach of the Sainsbury’s brand in the UK”.
King, who said he has not made any decision on his future career yet, said it was “not an easy decision” to step down but that “it is the right time”. He said he is proud of the financial achievements Sainsbury’s has made under his leadership but that “the greatest pride I have is the difference we’ve made for our colleagues and the pride they now have for the business”.
King added that Coupe is “absolutely the right candidate” to succeed him. Black said Coupe represents “continuity” for Sainsbury’s, and that he has been “very effective in his commercial role, proving to be astute to the market conditions and extolling the virtues of Sainsbury’s offer in challenging times”.
Sainsbury's boss Justin King to step down and Mike Coupe to take over
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'Sainsbury's may need to think differently in tough climate' says incoming boss Mike Coupe