Sainsbury's King draws up back-to-basics plan

Sainsbury's staff have had 'the toughest year of their lives,' according to new chief executive Justin King.

He wants the chain to go back to basics, focusing on customers and operational excellence. King said processes had become too complex, and the relationship between head office and stores was 'not as positive as it should be'.

He said: 'It's inevitable that people have become very internally focused, and the consequence is that you lose sight of the outside - in our terms, that's the customer.'

Since joining in March, King has spent half his time visiting stores and suppliers and meeting HQ staff.

He has shelved plans to change Sainsbury's brand image and slogan, preferring to concentrate on operations.

King said Sainsbury's will be defined by price, quality and service, and believes he can create a point of difference from the other UK grocers.

King has also simplified the group board structure. Managing director Stuart Mitchell has quit the business (Retail Week, April 9), but the grocer has hired former T&S Stores chief executive Jim McCarthy to the new post of managing director of convenience.

Sainsbury's disclosed group underlying profit before tax down 2.9 per cent to£675 million for the year to March 27.

Underlying operating profit at Sainsbury's Supermarkets was£564 million, down from£572 million the previous year. Group sales were up 2.4 per cent to£15.5 billion.

RW Baird analyst Paul Smiddy said: 'They are still going to sit between being a price-led and quality operator. That makes sense, because they haven't got the cost base to be an EDLP operator.'