Sainsbury's King to vacate throne in July

Supermarket boss Justin King has put an end to speculation about when he might leave Sainsbury's - he is off in July after the AGM.

by Andrew Saunders
Last Updated: 25 Feb 2014

Although his departure after 10 years in the hot seat is not unexpected, the markets are clearly sorry to see him go - Sainsbury’s share price dropped some 2% on the news, down to around 345p. That’s more than enough to buy you a Taste the Difference pork pie (or perhaps a Quiche Lorraine if that’s more your bag).
 
And no wonder - during his tenure King has transformed Sainsbury’s from a struggling brand living on past glories to a trim, toned and feisty retail competitor, more than doubling underlying profits in the process. In 2005/5 it made £254m: in 2012/13 it made £756m. He topped off his success last year by regaining the number two spot, still a way behind Tesco’s marketshare but a crucial whisker ahead of his old employer Asda.
 
King has also made his mark on the industry as a capable and charismatic figurehead, even picking up MT’s coveted Britain’s Most Admired Leader gong at the end of last year.
 
Of course the big question now is ‘Where next?’ - something that he has so far refused to be drawn on. Speculator suggest anything from M&S - where he was head of food in the early noughties - to Formula One (his son is a Formula Three racing driver).
 
King said of his move ‘This was not an easy decision for me to make, and in truth it will never feel like the right time to leave a company like Sainsbury’s. It has been a privilege to have led the company for the past 10 years and I am incredibly proud of our achievements in that time.’
 
But recently all has not been quite so rosy at Sainsbury’s as King made it seem. By his own admission the Christmas season was extremely tough, with like-for-like sales  up a tiny 0.2% on the previous year. And Sainsbury’s  faces the same structural challenge that dogs all its established rivals -what to do with all those expensive but probably unsellable out-of-town sheds as punters now stock up online web and fill-in shop at their local convenience branch.
 
Then there’s the rise of the discounters like Aldi and Lidl, who despite paradoxically having no online presence to speak of have been cleaning up at the other end of the market. With its ‘mid-market positioning Sainsbury’s is perhaps more vulnerable to this assault than anything else, and one gets the feeling that King will not be sorry to leave dealing with it to his successor.
 
That lucky individual is to be Mike Coupe, currently the group’s commercial director, of whom chairman David Tyler said ‘No-one knows Sainsbury’s - or the industry - better than Mike’.
 
Taking over from an established star is never easy - look at Tesco’s Phil Clarke - and MT wishes Coupe well. But we also reckon that he has more of a job on his hands than some of this mornings commentators seem to realise. Come July, he's going to need all the Nectar points he can get his hands on...

Read MT's exclusive interview with Justin King last month here.

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